Q2 2017 highlights
• Comparable EBIT increased by 2% to EUR 270 million (264 million in Q2 2016).
• Favourable market demand continued.
• High maintenance activity and seasonally higher fixed costs impacted comparable EBIT by approximately EUR -20 million compared with Q2 2016, EUR -45 million compared with Q1 2017.
• Solid operating cash flow at EUR 269 million (434 million).
• Net debt decreased to EUR 1,046 million (1,876 million).
• UPM announced new focused investments at the Kaukas pulp mill and Tampere labelstock factory.
H1 2017 highlights
• Comparable EBIT increased by 5% to EUR 575 million (545 million in H1 2016).
• Five business areas increased their comparable EBIT.
• Growth initiatives contributed to the comparable EBIT growth.
• Successful mitigation of raw material cost pressures.
• Strong operating cash flow at EUR 665 million (775 million).
• UPM announced divestments of hydropower assets in Germany, Austria and the US.
Jussi Pesonen, President and CEO, comments on the Q2 result:
“UPM’s comparable EBIT continued on an increasing track in Q2 despite clearly higher maintenance activity during the quarter. Operating cash flow was solid at EUR 269 million and net debt decreased to EUR 1,046 million.
Market demand was good and delivery growth continued in most businesses during the quarter. As expected, the higher maintenance activity resulted in temporarily higher fixed costs and lower operational efficiency. Moderate cost inflation continued but was mitigated by our own cost reduction measures and targeted price increases. Overall business conditions were favourable resulting in good performance.
UPM Biorefining benefitted from higher pulp prices, strong pulp demand and improved operational performance in UPM Biofuels. Profitability improved despite the maintenance shutdown at the UPM Pietarsaari pulp mill. UPM Raflatac and UPM Plywood maintained strong profitability and continued to show solid sales growth. UPM Specialty Papers achieved an excellent result. Thanks to the new specialty paper machine at UPM Changshu we have been able to grow the release liner business and improve our product mix even faster than expected.
UPM Paper ENA achieved a satisfactory result in the quarter most impacted by seasonal factors. Demand decline in Europe remained moderate. UPM Energy suffered from poor hydrological availability and prolonged maintenance activity at Olkiluoto power plant in Finland. As a result, power generation was exceptionally low during the quarter.
The focused growth projects over the recent years have been highly successful and have contributed to our profits and returns well. During the second quarter we introduced two further focused investments: the Kaukas pulp mill efficiency and competitiveness improvement in Lappeenranta and the UPM Raflatac specialty labels expansion in Tampere, both of which are in Finland.
more detail at: http://www.upm.com/About-us/Newsroom/Releases/Pages/UPM’s-good-performance-and-favourable-market-demand-continued-001-Tue-25-Jul-2017-09-18.aspx