UPM increased EBITDA margin to 16.3% in 1Q2017

UPM increased profitability amid higher sales in 1Q2017. According to the disclosed information, the company’s sales in the period totaled EUR 2,482 million, generating EUR 405 million of comparable EBITDA (16.3% margin). The indicators are respectively equivalent and 16% higher than in the same quarter the last year.

Jussi Pesonen, UPM’s President and CEO, commented:

“UPM started year 2017 with a successful quarter. Our performance continued on a high level thanks to strong operational efficiency and good growth in deliveries. Our comparable EBIT increased by 8% to EUR 305 million and our balance sheet strengthened further. Operating cash flow was strong at EUR 396 million and our net debt decreased to EUR 807 million.

Growth was the main driver of the improved financial performance. Demand was good for most of our products and markets, particularly in Asia, and we were able to serve the increasing customer demand with the help of our recent growth initiatives. While we enjoyed a favourable market environment, we also experienced moderate input cost inflation, which we managed to contain well.

All businesses performed well during the first quarter. UPM Biorefining reached record production in Pulp, Biofuels and Timber. Our recent pulp debottlenecking investments have been successful and the ongoing investment at UPM Kymi pulp mill is proceeding well. UPM Specialty Papers enjoyed strong markets and made good progress in driving its product mix forward, enabled by the new specialty paper machine in China. All of this was evident in the strong result for the quarter.

Both UPM Raflatac and UPM Plywood achieved record profits in the quarter, thanks to strong sales volumes and a favourable product mix. In Raflatac our efforts to strengthen our commercial capabilities are paying off and the labelstock investment in Poland is proceeding well. In Plywood, the Otepää investment in Estonia is already contributing to profitable growth in birch plywood.

UPM Paper ENA delivered another good quarter. We announced sale agreements of hydropower facilities in Germany, Austria and the US, which will add to Paper ENA’s strong cash flow later this year. UPM Energy profits decreased due to a mild winter and low hydropower volumes.

We look confidently to the future as shown by our new ambitious long-term financial targets announced in January. We have competitive businesses with strong market positions and attractive growth opportunities. Going forward we continue to aim higher with our performance. With our cash flow and balance sheet we can distribute attractive dividends and invest in profitable growth simultaneously.”

In 4Q2016 UPM decreased EBITDA margin to 14.1%.

Check other wood business-related companies 1Q2017 schedules for financial and operating results.

Earlier UPM informed that the company decided to expand UPM Brite family production to its UPM Steyrermühl mill in Austria.

About UPM:

The company is largely focused on fibre- and biomass-based businesses, recyclable raw materials and products. UPM integrates bio and forest industries and operates across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper ENA (Europe and North America) and UPM Plywood.

Source: Woodbizforum