UPM-Kymmene Corporation reported a 32% increase in its comparable EBIT for the third quarter of 2024, despite facing a slowdown in market demand for its products. The company’s sales decreased by 2% year-on-year to EUR 2,521 million, down from EUR 2,584 million in Q3 2023.
In its Q3 results, UPM highlighted a comparable EBIT of EUR 291 million, representing 11.5% of sales, compared to EUR 220 million and 8.5% of sales in the same period last year. The company’s operating cash flow, however, saw a significant decline, falling to EUR 242 million from EUR 641 million in Q3 2023.
UPM attributed the improvement in earnings to the full ramp-up of its UPM Paso de los Toros pulp mill, which contributed significantly to profitability. However, the company noted that the recovery in demand for its products slowed after an encouraging start to the year.
Massimo Reynaudo, president and CEO of UPM, commented on the results: “Our Q3 results improved both year-on-year and quarter-on-quarter, with a significant contribution from the fully ramped-up UPM Paso de los Toros pulp mill. The earnings improvement, albeit good, was lower than earlier expected as the market demand for our products slowed down after the encouraging start of the year. We took measures in several of our businesses to safeguard profitability and we continue to take decisive actions to ensure the competitiveness of our businesses and support our growth ambitions”.
As of the end of September 2024, UPM’s net debt increased to EUR 2,804 million, up from EUR 2,363 million in Q3 2023. The company’s net debt-to-EBITDA ratio stood at 1.59, compared to 1.27 a year earlier. However, UPM’s liquidity remained strong, with cash funds and unused committed credit facilities amounting to EUR 3.7 billion.
UPM also made notable moves in its strategic development during the quarter. In August, the company successfully issued its fourth Green Bond, raising EUR 600 million. Additionally, UPM continued to expand its business portfolio, including the acquisition of Grafityp in Belgium to accelerate growth in its UPM Raflatac division.
The company also took steps to streamline its operations, including the closure of the Hürth newsprint mill and the decision to shut down one fine paper machine at its Nordland mill in Germany.
Looking ahead, UPM remains focused on its long-term strategy for growth. In its recent Capital Markets Day held in September, UPM presented its next strategic phase, emphasizing sustainable and renewable feedstocks, fossil-free energy, and robust growth in renewable fibers, advanced materials, and decarbonization solutions.
“Our Q3 sales were EUR 2,521 million, and our comparable EBIT increased by 32% to EUR 291 million. Our net debt was EUR 2,804 million, 1.59 times EBITDA. Cash funds and unused committed credit facilities totaled EUR 3.7 billion at the end of the quarter, following the successful issuance of our fourth Green Bond, for EUR 600 million, in August”, Reynaudo added.
For the year-to-date period, UPM reported a 3% decrease in sales, totaling EUR 7,707 million, down from EUR 7,929 million in the first nine months of 2023. However, comparable EBIT rose by 17% to EUR 806 million, or 10.5% of sales, compared to EUR 689 million (8.7% of sales) during the same period last year.
Additionally, UPM was recognized by EcoVadis with a platinum score for its sustainability performance and received a double ‘A’ score from CDP for its transparency on climate change and forest-related issues.
