Clearwater Provides an Update of Impact on Operations From Hurricane Helene

Following the transfer of Massimo Reynaudo from UPM Communication Papers to lead UPM-Kymmene Corporation as its President and CEO, Antti Jääskeläinen has been appointed to act as interim Executive Vice President of UPM Communication Papers until a successor has been appointed. Antti Jääskeläinen assumes this role on top of his current duties and continues in his current role as Executive Vice President of UPM Raflatac. Antti Jääskeläinen’s biographical details are available at the company’s website. Saara Tahvanainen has been appointed Executive Vice President responsible for UPM’s Stakeholder Relations, and member of UPM’s Group Executive Team. Stakeholder Relations covers communications, brand/marketing, corporate responsibility, and public affairs. She will start in the role latest on 15 July 2024. She will report to Massimo Reynaudo, President and CEO, and will be based in Helsinki, Finland.

Average input costs were stable sequentially and cost control was strong across the business. Currency movements had a net negative impact on underlying EBITDA compared to the second quarter, driven by a weaker US dollar, impacting a number of the Group's globally traded products, coupled with a weaker Russian rouble and Turkish lira. Given prevailing exchange rates, we anticipate a further net negative currency impact in the fourth quarter. During the quarter, planned maintenance shuts with an estimated impact on underlying EBITDA of around €35 million (2019: €40 million) were carried out successfully. Based on prevailing market prices, we continue to estimate that the impact of planned mill maintenance shuts on underlying EBITDA for 2020 will be around €100 million (2019: €150 million), with the fourth quarter impact expected to be around €55 million (2019: €30 million). Our major capital investment projects are progressing according to plan. The €67 million capital investment project to convert a containerboard machine at Štětí (Czech Republic) to become fully dedicated to the production of speciality kraft paper for shopping bag applications is scheduled to be commissioned during the fourth quarter. This additional capacity (75,000 tonnes) further supports our retail customers in their efforts to replace unnecessary plastic as they transition to more sustainable packaging solutions that contribute to the circular economy.

In the near future, certain uncoated groundwood paper products imported into the United States from Canada may be subjected to U.S. countervailing (CVD) and/or anti-dumping (AD) duties. These duties arise from petitions made by North Pacific Paper Company (NORPAC), a U.S.-based pulp and paper manufacturer, to the U.S. Department of Commerce and the U.S. International Trade Commission that allege Canada’s UGW paper exports are unfairly priced and/or that Canadian federal and provincial governments subsidize domestic producers – including Catalyst – thereby placing U.S. manufacturers of uncoated groundwood paper at an unfair disadvantage. I am writing to advise that Catalyst intends to implement price surcharges on our uncoated groundwood paper products we import into the USA that are subject to these CVD and AD duties. These surcharges will directly mirror the charges imposed on Catalyst by the U.S. Government. We will inform you of the level of Surcharge as soon as it becomes available. Click Read More below for additional information.