Pulp production marginally decreased to 356,244 ADMTs in the current quarter, from 356,859 ADMTs in the same quarter of 2009, primarily due to extreme winter weather conditions in Germany and temporary equipment failures adversely affecting production at our German mills.

Pulp sales volume increased to 385,989 ADMTs in the current quarter from 351,797 ADMTs in the comparative period of 2009, primarily as a result of stronger demand. Average pulp sales realizations increased to €593 per ADMT in the fourth quarter of 2010, compared to €434 per ADMT in the same period last year, primarily due to higher pulp prices. 

Costs and expenses in the fourth quarter of 2010 increased to €195.2 million from €155.3 million in the comparative period of 2009, primarily due to higher fiber costs.

On average, our overall fiber costs in the current quarter increased by approximately 25% from the same period in 2009, primarily due to higher fiber costs at our German mills caused by lower levels of harvesting in central Germany, along with extreme winter weather conditions in the fourth quarter of 2010.

For the fourth quarter of 2010, operating income increased fivefold to €50.4 million from €9.8 million in the comparative quarter of 2009, primarily due to improved pulp prices.

Interest expense in the fourth quarter of 2010 increased to €16.5 million from €15.8 million in the comparative quarter of 2009, primarily due to accretion expense related to the exchange of our convertible notes, partially offset by reduced levels of debt associated with the Stendal mill.

Our Stendal mill recorded an unrealized gain of €12.4 million on our interest rate derivatives in the current quarter, compared to an unrealized gain of €5.1 million in the same quarter of last year. We recorded a foreign exchange loss on our debt of €1.5 million in the fourth quarter of 2010 compared to a loss of €1.8 million in the same period last year.

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