UPM reports Q3 profit rise



31 October 2006 — Helsinki (FIN): UPM has posted increased Q3 profit in all divisions.


Operating profit excluding non-recurring items was €209 million ($267 million), up from €172million in 2005.


EPS excluding non-recurring items were €0.25, up from €0.19 the year before.


Sales also increased to €2.4 billion, from €2,243 million in Q3 2005.


UPM’s President and CEO Jussi Pesonen said the results reflected the company’s recent profitability programme.


"All paper divisions reported enhanced operating profit, which is good news. Also the self-adhesive business and wood products, particularly sawmills, performed well. Improved efficiency has enabled us to offset higher costs.


"Our profitability programme is progressing as planned. Savings in fixed costs will materialize starting from the fourth quarter. The whole organisation is focused on implementing the programme and we will be able to deliver what we promised last spring.


"The annual growth in demand has been healthy this year. We estimate that full year growth in paper demand in Europe will be slightly under 3 percent."


Pesonen said he expected good paper demand throughout Q4 and a "slight" improvement in average paper prices due to price increases in fine papers.


"Good growth in demand for self-adhesive materials and strong markets for both plywood and sawn timber are expected to continue," he added. "Costs of raw materials and energy are forecast to continue to rise faster than inflation but an increase in company’s overall costs is expected to be moderate."