UPM-Kymmene Corporation Company Announcement April 24, 2008 at 12:00 (Finnish
time)
Interim Report January-March 2008: Earnings per share for the first quarter were
EUR 0.20 (EUR 0.25 for the first quarter of 2007), excluding special items EUR
0.19 (0.25). Operating profit was EUR 193 million (221 million), excluding
special items EUR 188 (221 million). Fibre costs and currencies effected the
result.
Jussi Pesonen, President and CEO, comments on the result of the first quarter of
2008:
"Our timely and continued cost savings measures were a good response to the
heavy challenges posed by the steeply increasing cost of wood and the
strengthening euro. On the positive side, the demand for most paper grades,
particularly magazine paper, and plywood remained good. Our delivery volumes in
paper were about the same as last year despite our considerable capacity
reductions."
"The market balance in magazine papers improved and we could increase prices
both in Europe and in the export markets. Unfortunately, the announced capacity
closures in standard newsprint have materialized slowly in the industry and the
market prices declined compared to last year. Our early measures to temporarily
shut down newsprint capacity were correct and necessary in this situation."
"Our current order books in magazine paper, newsprint and fine papers are
seasonally good. To address the poor profitability of certain businesses, we
have decided on temporary shutdowns in our fine paper mills in Central Europe
for one to three months."
"The profitability of the Label Division was disappointing. The label business
is early cyclical to the weakening economy. UPM has already initiated measures
to improve cost efficiency and increased prices to cope with the increased
costs. I expect the situation to improve clearly once the ongoing investment
programme is completed."
"In wood products, plywood continued its strong performance whereas in
sawmilling there was a clear decline due to the market conditions."
"Wood fibre costs for 2008 are forecast to be higher than in the earlier
forecast for the full year. However, the increase in the company's overall costs
is still expected to be about 2%. This includes cost savings from the ongoing
profitability programme," says Pesonen.
For more information please contact:
Mr Jussi Pesonen, President and CEO, UPM, tel. +358 204 15 0001
Mr Jyrki Salo, Executive Vice President and CFO, UPM, tel. +358 204 15 0011
***
News conference and conference call information
A news conference on the Interim Report will be held today, April 24, 2008, at
UPM's Head Office in Helsinki, Eteläesplanadi 2, at 14:00 Finnish time (12:00 UK
time, 07:00 EST). The briefing can be followed live on the Internet at
www.upm-kymmene.com. The on-demand version of the audio cast will be available
online for three months.
To participate in the UPM conference call, please dial +44 (0)1452 555 566 today
at 17:00 Finnish time (15:00 UK time, 10:00 EST). The conference call title is:
"UPM-Kymmene Interim Review Q1 2008", access code: 42144989. A recording of the
discussion can be heard until May 1, 2008 by calling +44 (0)1452 550 000, access
code 42144989#.
In the United States and Canada, the Conference Call toll free number is +1 866
966 9439; UK free call number 0800 6940 257.
The recording can be heard at the toll free dial (USA and Canada) at the number
+1 866 247 4222; UK free call 0800 953 1533;UK local call 0845 245 5205; access
code: 42144989#.
***
It should be noted that certain statements herein which are not historical
facts, including, without limitation, those regarding expectations for market
growth and developments; expectations for growth and profitability; and
statements preceded by "believes", "expects", "anticipates", "foresees", or
similar expressions, are forward-looking statements. Since these statements are
based on current plans, estimates and projections, they involve risks and
uncertainties which may cause actual results to materially differ from those
expressed in such forward-looking statements. Such factors include, but are not
limited to: (1) operating factors such as continued success of manufacturing
activities and the achievement of efficiencies therein including the
availability and cost of production inputs, continued success of product
development, acceptance of new products or services by the Group's targeted
customers, success of the existing and future collaboration arrangements,
changes in business strategy or development plans or targets, changes in the
degree of protection created by the Group's patents and other intellectual
property rights, the availability of capital on acceptable terms; (2) industry
conditions, such as strength of product demand, intensity of competition,
prevailing and future global market prices for the Group's products and the
pricing pressures thereto, financial condition of the customers and the
competitors of the Group, the potential introduction of competing products and
technologies by competitors; and (3) general economic conditions, such as rates
of economic growth in the Group's principal geographic markets or fluctuations
in exchange and interest rates. For more detailed information about risk
factors, see pages 68-69 of the company's Annual Report 2007.
UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Corporate Communications
DISTRIBUTION
OMX Nordic Exchange Helsinki
Main media
www.upm-kymmene.com
UPM, Corporate Communications
Media Desk, tel. +358 40 588 3284
communications@upm-kymmene.com
Timely cost measures supported UPM's profitability; Fibre costs effected the result
| Source: UPM-Kymmene Oyj