Profit warning, inside information: UPM lowers its outlook due to lower deliveries in most businesses and decreased pulp prices

Oct 16 2024 10:32 BST

HELSINKI , Oct. 16, 2024 /PRNewswire/ -- UPM lowers its outlook for 2024 and releases its preliminary Q3 2024 results. During the second half of the year, UPM's earnings have improved, however less than earlier expected. Comparable EBIT in Q3 2024 increased by 32% to EUR 291 million from Q3 2023, and 17% for the first nine months compared to last year. Comparable EBIT in Q4 2024 is expected to be on similar level or increase from Q4 2023 (EUR 323 million). Therefore, UPM's comparable EBIT in full-year 2024 is expected to be on similar level or increase from 2023.

During the second half of the year, market demand for UPM's products has been weaker than expected, leading to lower delivery volumes in most businesses.

On the positive side, the new UPM Paso de los Toros pulp mill has operated in full production since its first maintenance shutdown in June. However, the weakened pulp market and the high wood cost in Finland had a negative impact on the UPM Fibres business.

Earlier, UPM expected its full-year 2024 comparable EBIT to increase from 2023, and its H2 2024 comparable EBIT to be higher than in H1 2024. See the full previous outlook text below for reference.

UPM releases its preliminary results for Q3 2024. Sales decreased by 2% to EUR 2,521 million (2,584 million in Q3 2023). Comparable EBIT in Q3 2024 increased by 32% to EUR 291 million, 11,5% of sales (220 million, 8,5%).

UPM will release its Interim Report Q3 2024 on 29 October 2024.

Sales (EURm)	Q3/2024	Q2/2024	Q3/2023	Q1-Q3/2024	Q1-Q3/2023	2023
UPM Fibres	943	922	817	2,727	2,263	3,044
UPM Energy	125	130	142	465	435	628
UPM Raflatac	374	397	367	1,181	1,118	1,485
UPM Specialty Papers	335	367	357	1,099	1,111	1,485
UPM Communication Papers	751	711	807	2,265	2,799	3,598
UPM Plywood	103	120	96	321	331	422
Other operations	141	172	251	466	610	802
Internal sales	-252	-272	-251	-816	-735	-1,000
Eliminations and reconciliation	0	-1	-1	-2	-2	-3
Sales, total	2,521	2,546	2,584	7,707	7,929	10,460

Comparable EBIT (EURm)	Q3/2024	Q2/2024	Q3/2023	Q1-Q3/2024	Q1-Q3/2023	2023
UPM Fibres	190	99	-18	397	92	116
UPM Energy	22	16	30	124	139	182
UPM Raflatac	24	39	33	112	78	103
UPM Specialty Papers	22	41	37	114	46	98
UPM Communication Papers	51	35	96	165	262	462
UPM Plywood	9	16	9	35	49	56
Other operations	-23	-55	26	-114	0	-14
Eliminations and reconciliation	-4	-8	7	-28	24	8
Comparable EBIT, total	291	182	220	806	689	1,013
% of sales	11.5	7.2	8.5	10.5	8.7	9.7

Previous outlook for 2024 for reference:

UPM's full-year 2024 comparable EBIT is expected to increase from 2023, supported by higher delivery volumes, the ramp-up and optimisation of the UPM Paso de los Toros pulp mill, and lower fixed costs. Demand for many UPM products is expected to gradually improve as the destocking seen in 2023 is over. The market conditions for renewable fuels are expected to be weaker than last year. UPM continues to manage margins and take actions to reduce variable and fixed costs.

In H2 2024, comparable EBIT is expected to be higher than in H1 2024. This improvement is expected to come especially from UPM Fibres, with the full pulp capacity available and pulp price levels starting at a higher level than at the start of the year. There are no major maintenance shutdowns scheduled for the company in H2 2024, whereas H1 2024 was impacted by unusually high maintenance activity and political strikes in Finland. The timing of the annual energy-related refunds is expected to support the result in Q4.

UPM, Media Relations
Mon-Fri 9:00-16:00 EEST
tel. +358 40 588 3284
media@upm.com

UPM

We deliver renewable and responsible solutions and innovate for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers and UPM Plywood. As the industry leader in responsibility, we are committed to the UN Business Ambition for 1.5°C and the science-based targets to mitigate climate change. We employ 16,600 people worldwide and our annual sales are approximately EUR 10.5 billion. Our shares are listed on Nasdaq Helsinki Ltd. UPM Biofore - Beyond fossils. www.upm.com

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Profit warning, inside information: UPM lowers its outlook due to lower deliveries in most businesses and decreased pulp prices