Interim reports|Comparable operating profit increased by 60 percent.
Forestry company UPM’s profitability has improved.
In April–June, the company’s turnover remained unchanged at a generous 2.5 billion euros, but the comparable operating profit increased by 60 percent to 182 million euros.
The operating profit percentage, which measures profitability, was 7.2, while it was 4.5 a year earlier. Despite the noticeable improvement in profitability, the comparable operating profit did not meet analysts’ expectations, as they expected it to have increased to 202 million euros.
“The profit improvement was supported by the moderate recovery of the product market and the higher impact of the UPM Paso de los Toros pulp mill on the result than before. Exceptionally extensive maintenance activities at pulp mills and nuclear power plant units affected our ability to generate results. The shutdowns were completed successfully, and the production plants are now in excellent condition to serve customers at full capacity in the second half of the year,” says the CEO Massimo Reynaudo in the interim report.
The company the profitability of the largest business group was improved by the increase in the price of pulp. The turnover of the pulp and sawmill business increased by 17 percent to 922 million euros. Comparable operating profit was 99 million euros, compared to a loss of 24 million euros a year earlier.
UPM expects good attendance rates and better results from the second half of the year. The company’s largest ever investment in the Paso de los Toros pulp mill in Uruguay has moved from start-up to regular production.
“When the competitive business platform in Uruguay operates at full scale, we expect the growing pulp deliveries to improve the result of the second half of the year. With the help of competitive business operations operating in growing markets, UPM is able to achieve a good result at the same time as the company prepares for the next phase of growth,” CEO Reynaudo assessed in the interim report.
The company estimates that the demand for many products will improve gradually, because last year’s stock removal is over.
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