Business News
UPM CONTINUED TO IMPROVE PROFITABILITY, BALANCE SHEET STRENGTHENED FURTHER
Thursday 28. October 2010 - Interim Report for January-September 2010:
Q3/2010
Earnings per share were EUR 0.34 (0.08), excluding special items EUR 0.28 (0.14)
EBITDA was EUR 384 million, 16.6% of sales (334 million,17.5% of sales)
Best EBITDA in three years
Sales prices and delivery volumes increased in all businesses – sales grew by 21%
Q1-Q3/2010
Earnings per share were EUR 0.80 (-0.24), excluding special items EUR 0.72 (-0.10)
EBITDA was EUR 1,025 million, 15.6% of sales (EUR 700 million, 12.5% of sales)
Demand and delivery volumes increased in all businesses – sales grew by 17%
Solid cash flow – net debt now lower than before the Uruguay acquisition in Q4 2009
Jussi Pesonen, UPM President and CEO, comments on the result for the third quarter of 2010:
“UPM’s consistent and strong EBITDA performance continued in the third quarter. Our delivery volumes and sales prices increased in all businesses and sales grew by 21% compared with last year.
In recent years, one of our targets has been to strengthen the balance sheet so that we are ready for strategic manoeuvres. Today, our business structure and the quality of our asset base work well for us. They secure good quality cash flow with moderate investments. The fact that our current net debt is lower than before the Uruguay acquisition underlines this point.
In Energy, our versatile and cost competitive energy portfolio has secured us a good and steady performance. In the Pulp business area, we have benefited from the recent strong demand and from good pricing.
In Paper, demand increased in all of our main markets, including also publication papers. We managed to increase average paper prices in euros by 4% compared with last year. However, the Paper business made an operating loss due to significantly higher fibre costs than last year. We aim to increase prices in all new contracts to compensate for the increased raw material costs.
The profitability of the Label business improved compared with last year. Despite the rapid raw material cost inflation, the business managed to maintain its margins through productivity improvements and sales price increases.
The construction industry has not yet recovered and building activity is low. However, in Plywood, business prospects have improved in industrial end uses. The profitability of the Timber business is challenged by weakening of the market.
For the final quarter, we estimate both sales prices in euros and deliveries to be in line with the third quarter. Increases in variable costs will continue. We repeat our guidance for the full year 2010 and expect the operating profit for the second half of the year to be higher than for the first half”, says Pesonen.