UPM-Kymmene Interim Report for Q2 2016:

jussi Pesonen, president and CEO, comments on the Q2 results:
‘The first half of 2016 gives further evidence that we are on the right track. We have a strong business model with six agile businesses, efficient capital allocation and an industry-leading balance sheet. For the future, this ensures good opportunities for focused investments in growth, continued strong cash flow and an attractive dividend.

‘In the second quarter, our growth projects and cost-efficiency measures continued to deliver and our comparable EBIT grew by 21% year-on-year. Cash flow strengthened even further and cumulatively reached a record of EUR 1.5 billion over the past 12 months. By the end of the quarter, our net debt was EUR 759 million lower than a year ago.

‘UPM businesses enjoyed mostly favourable market demand during the quarter. We are responding to the market demand with timely growth investments in UPM Biorefining, UPM Paper Asia, UPM Raflatac and UPM Plywood. At the same time, we are taking good care of our cost ‘efficiency and the cost take-outs continue on the previous track. This is evident in our improved performance.

‘UPM Paper ENA was successful in releasing cash by improving profitability, reducing working capital and selling assets, in line with its role. In UPM Energy, the advantageous hedges from previous years have now largely rolled over and the profitability is on a competitive level despite the current market situation.

‘Going forward we have several growth projects in the pipeline. We are continuing to ramp up production at the new UPM Changshu speciality paper machine, as well as the Lappeenranta biorefinery, following its maintenance shutdown in Q2. Ongoing projects in the Otepää plywood mill in Estonia and UPM Kaukas pulp mill in Finland will be finalised by the end of the year. In July, we announced a EUR 98 million expansion investment in the UPM Kymi pulp mill in Finland. After this project we will have increased our total annual pulp production capacity by more than 500,000 tonnes since 2013, with low investment cost. We are also considering prospects for long-term development in Uruguay.’

Outlook for 2016
UPM's profitability improved in 2015 and the improvement is expected to continue in 2016. The business performance is underpinned by the company's growth projects and continuous cost efficiency measures.

UPM's growth projects are expected to contribute positively to the company's earnings in 2016, compared with 2015. UPM continues its measures to reduce variable and fixed costs in 2016. Currencies are expected to contribute positively as hedges roll over, assuming relevant currencies stay at the same level as at the end of 2015.
For the complete announcement with Key Figures Chart, which we cannot include here, please go to: www.upm.com

Graphic Repro On-line -  St. Petersburg -  RUSIA -  26 julio 2016