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UPM
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Helsinki, Finland, 24 April 2007 -- /PRNewswire/ -- UPM annouces the following highlights of its Interim report for January-March 2007:

- Earnings per share, excluding special items, for the first quarter were EUR 0.25 (EUR 0.21 for the first quarter of 2006).

- EBITDA was EUR 418 million, 16.6% of sales (EUR 386 million, 15.7%).

- Operating profit, excluding special items, was EUR 221 million (EUR 185 million).

- A new Label Division was formed for self-adhesive label and RFID businesses.

Jussi Pesonen, president and CEO, comments on the result of the first quarter of 2007:

"UPM's year has started off well. Enhanced efficiency was visible in our result and our operating profit grew clearly during the first quarter. The fixed costs decreased as planned.

"Demand for paper continued to grow. The prices of newsprint, uncoated fine paper and some speciality papers increased. However, the price development in magazine papers has been clearly disappointing. The average price for paper deliveries remained at the same level as last year. Our deliveries in Europe increased in line with the market growth.

"The business environment is, however, challenging. Increase in the raw material costs--wood and recycled fiber in particular--is weakening the profitability. In Finland, the price of wood is now at a record high. We, however, managed to maintain a moderate cost inflation at 1%-2%.

"There was strong growth of demand in sawn goods. Due to the realized structural changes UPM was able to capitalize well on the market development, even though the availability of wood logs was a challenge. Self-adhesive label markets continued to develop favourably and prices remained steady.

"For the second quarter, demand for printing papers is forecast to grow in Europe from the corresponding quarter of last year, while in North America demand is expected to decrease. Strong growth in demand is expected to continue in the emerging markets. In the second quarter, we estimate our paper deliveries to increase from last year and average price for all paper deliveries to be about the same as in the first quarter of 2007.

"Demand for self-adhesive label materials is forecast to continue to grow in all markets, and prices are expected to remain stable. In wood products, strong demand for plywood and sawn timber will continue during the second quarter.

"Increase in wood cost and possible lack of sufficient supply of wood raw material may result in less optimal use of capacity.

"The company's overall cost inflation is estimated to remain at the level of 1%-2%, including expected cost savings from the ongoing profitability program," said Pesonen.

News conference and conference call information

A news conference on the Interim Report January-March 2007 will be held 24 April 2007, at UPM's Head Office in Helsinki. The briefing can be followed live on the Internet at www.upm-kymmene.com. A recording of the briefing will be available at this address for the next three months.

To participate in the UPM conference call, dial +44-(0)1452-542 300 today. The conference call title is: UPM Q1 2007 Financial Results, access code: 5880836. A recording of the discussion can be heard until 01 May 2007, by calling +44-(0)1452-550-000, access code 5880836#.

In the United States and Canada, the conference call toll free number is +1-866-220-1452. The recording can be heard at the toll free dial in number +1-866-247-4222, access code: 5880836#.

For more information on UPM's Interim Report, January-March 2007, visit www.upm-kymmene.com

Source: UPM-Kymmene Group


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