Business News
Second quarter hit by high raw material costs, pressure continues, UPM committed to improve profitability
Thursday 24. July 2008 - Interim report January-June 2008: - Earnings per share for the second quarter were EUR 0.18 (EUR -0.38 for the second quarter of 2007), excluding special items EUR 0.17 (0.28) - Operating profit was EUR 157 million (a loss of 75 million) excluding special items EUR 155 million (225 million) - Increase of overall costs for the full year is still expected to be about 2%
Jussi Pesonen, UPM’s President and CEO, comments on the result of the second quarter of 2008:
“Regrettably UPM’s result for the second quarter was weak. While our internal cost efficiency improved, our result was hit by the high wood and recovered paper costs as well as significantly lower market prices for sawn timber. Neither did the exchange rates work in our favour. On the positive side, we were able to increase magazine paper prices and the average price of paper was slightly higher than last year. Also the turnaround measures of the Label Division got off to a good start.”
“The demand outlook of our businesses has weakened since the beginning of the year, and our operative profitability for the full year 2008 is expected to be lower than that of last year.”
“With this in mind, we are currently assessing the market potential of different businesses, price and availability of raw materials as well as the cost competitiveness of our various units. This review may result in permanent or temporary closures.”
“In Finland, it is clear that we can only develop our Finnish units in the long term providing that low cost Finnish wood is available. This is something we will take into consideration in our assessment. We will make our plans based on the assumption that the Russian export duty on wood will be implemented in the beginning of 2009.”
“Due to cost savings from the ongoing profitability actions, the increase in the companys overall costs for the full year is still expected to be about 2%,” says Pesonen.