Banking

Finland's UPM beats forecasts as pulp, timber and biofuels surge

Finland's UPM on Thursday posted a bigger-than-expected rise in second-quarter operating profit, after its pulp, timber and biofuels division put in its best performance yet.

Adds details on business units, CEO quote, context

HELSINKI, July 22 (Reuters) - Finland's UPM UPM.HE on Thursday posted a bigger-than-expected rise in second-quarter operating profit, after its pulp, timber and biofuels division put in its best performance yet.

UPM's share price rose 1.5% to 33.4 euros by 0719 GMT, outperforming the broader market.

While other business units remained stable or grew slightly, UPM's Biorefining unit, producing pulp, timber and biofuels, saw its sales grow 18% to 714 million euros ($842.16 million) and operating profit 211% to 190 million euros.

"The most notable improvement was seen in UPM Biorefining where pulp and sawn timber prices soared, and the business area had its best second quarter ever," Chief Executive Jussi Pesonen said in a statement.

UPM's operating profit rose to 304 million euros from 148 million and beat the 274.5 million mean estimate from eight analysts polled by Refinitiv.

Increased demand lifted second-quarter sales at UPM's paper unit by 6% to 867 million euros but the unit made a loss of 14 million following lower sales prices and higher costs.

UPM said it expects pulp and graphic paper prices to continue rising and for its 2021 comparable operating profit to be clearly higher than in 2020.

The company added it plans to offset rising costs with higher prices.

UPM's results echo its domestic peer Stora Enso STERV.HE, which on Wednesday reported a bigger-than-expected jump in second-quarter core earnings but saw its paper business fall to a loss despite stable sales.

($1 = 0.8478 euros)

(Reporting by Essi Lehto; editing by Jason Neely and Barbara Lewis)

((Essi.Lehto@thomsonreuters.com; +358505412375;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Commodities

Latest Personal Finance Videos

    Growth in Separately Managed Accounts and Why They Are Attractive for Financial Advisors

    Nasdaq Dorsey Wright Client Portfolio Manager Andy Hyer discusses the growth in Separately Managed Accounts and why they are attractive for financial advisors.

    Jul 20, 2021

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More