UPM’s result barely exceeded analysts’ forecast

Forest industry company UPM-Kymmene the comparable operating profit in April–June was 212 million euros. At the same time last year, the company’s comparable operating profit was 124 million euros.

The result exceeded the forecast of 20 analysts compiled by Factset. Analysts expected a comparable operating profit of 210 million euros from the company.

The company’s turnover in the review period was 2,355 million euros. In April–June last year, the turnover was 2,341 million euros.

Turnover fell short of analysts’ forecasts. Analysts expected a turnover of EUR 2,431 million from the company.

UPM’s earnings per share in April–June were EUR 0.29, while a year earlier it was EUR 0.13. Earnings per share met the forecast, as analysts were expecting earnings per share of 0.29 euros.

The company’s operating result in the review period was 208 million euros. At the same time last year, the operating result was 105 million euros.

UPM expects the comparable operating profit of continuing operations to be approximately EUR 375–575 million in the second half of the current year, compared to EUR 479 million at the same time last year. The company estimates that the result will be supported by moderately rising sales prices, although variable costs are expected to rise moderately.

UPM estimates that there are still significant uncertainties in geopolitics and trade relations.

“In the second quarter, we reached two important milestones in UPM’s transformation. We signed the final agreement to establish a graphic paper joint venture Sappin with and we progressed in differentiating the plywood business into a new one to WISA Group. These measures strengthen UPM’s growth prospects and make the result more predictable”, UPM’s CEO Massimo Reynaudo evaluate in the results bulletin.

According to him, the ongoing renewal of the portfolio emphasizes the company’s position in businesses with stronger growth characteristics, and the direction is towards products with higher added value and less cyclicality.

Reynaudo also commented on the situation in the company’s pulp market, where operations in Uruguay have improved their efficiency and benefited from the moderate rise in pulp prices. Finland’s operating environment, on the other hand, is challenging, and even though pulpwood prices have fallen, profitability remains low.

According to the CEO, the company is planning temporary closures of UPM Kaukaa and possibly UPM Pietarsaari pulp mills as well. The measures aim to optimize production and wood procurement and ensure profitability.

UPM says it has signed a South African Sappin with the final agreement on the graphic papers joint venture. In addition, the company’s board has approved a plan to separate the plywood business into a new Wisa listed company, which will be decided at the extraordinary general meeting to be held at the end of August.

The news is based on the company’s stock exchange release and analyst forecast, if one has been available. The news has been prepared by artificial intelligence and checked by the editor before publication.

Addition at 9:55 AM: Added graphics.