The Finnish company UPM released its financial results for the first half of 2023. According to the company’s president and CEO, Jussi Pesonen, the second quarter of the year “was disappointing”.
“During the first half of the year the business environment was exceptional. Geopolitical uncertainty, low economic activity and high inflation were impacting consumers. At the same time, the extraordinary destocking in product value chains continued in our industry. Consequently, we saw a strong and rapid downturn in the markets. Deliveries of our products were well below estimated end-use demand, and global commodity prices, such as pulp and energy, fell from historic highs to cyclical bottom levels in six months,” commented the executive.
In this context, the company reported sales that totaled 2,558 million euros between April and June, slightly below the 2,562 million recorded in the previous year during the same period. Comparable EBIT decreased by 71% to 114 million euros, from 387 million in the annual comparison.
“On the positive side, in Q2 our lower variable input costs contributed positively to the result. We have responded to challenging markets by continuing agile margin management and taking swift cost cutting measures. Permanent and temporary layoffs, flexible working hours and restructuring activities are being undertaken across UPM businesses,” added Pesonen.
In the first half, between January and June, sales increased by 5%, to 5,345 million euros, while comparable EBIT decreased 29%, to 470 million euros.
During this period, UPM completed its exit from Russia and increased pulp production in Uruguay, with the start-up of the Paso de los Toros plant, as planned.
“Our strategic milestone, UPM Paso de los Toros pulp mill shipped its first customer deliveries in May and the ramp-up has proceeded well, reaching 70% run-rate in July,” said the president and CEO.
“All in all, the first half of the year was challenging as the world has been adjusting to new economic and political realities. Nevertheless, I am confident that UPM businesses will improve significantly when the business cycle takes a more favourable turn. The positive long-term drivers and growth prospects for UPM are intact and exciting,” concluded Jussi Pesonen.
