UPM-Kymmene Oyj (OHEL:UPM)
€ 26 -0.24 (-0.91%) Market Cap: 13.87 Bil Enterprise Value: 16.78 Bil PE Ratio: 20.00 PB Ratio: 1.29 GF Score: 75/100
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Q3 2024 UPM-Kymmene Oyj Earnings Call Transcript

Oct 29, 2024 / 11:15AM GMT
Release Date Price: €28.45 (-2.10%)

Key Points

Positve
  • UPM-Kymmene Oyj (UPMKF) reported a 32% year-on-year and 60% sequential increase in comparable EBIT, totaling EUR 291 million or 11.5% of sales.
  • The Paso de los Toros pulp mill is fully ramped up, contributing positively to the company's earnings.
  • Fixed costs were reduced by EUR 56 million year-on-year, demonstrating effective cost management.
  • The company is well-positioned for growth in renewable fibers, advanced materials, and decarbonization solutions.
  • UPM-Kymmene Oyj (UPMKF) expects its fourth-quarter comparable EBIT to be at a similar level or increase from the fourth quarter of last year.
Negative
  • Q3 sales decreased by 2% from the previous year due to lower than expected volumes.
  • Market demand for UPM-Kymmene Oyj (UPMKF)'s products slowed down, particularly in Europe, impacting sales and EBIT.
  • The pulp market in China was soft during the summer, resulting in lower deliveries and decreased prices.
  • High wood costs in Finland are unsustainable and have led to temporary downtime at pulp mills.
  • The demand for advanced materials has been inconsistent, with a strong start to the year followed by a softening in Q2 and Q3.
Massimo Reynaudo
UPM-Kymmene Oyj - President, Chief Executive Officer, Member of the Group Executive Team

Hello everyone. Welcome to UPM's quarter three, 2024 results webcast. My name is Massimo Reinaudo. I am the CEO of UPM. Here with me is Stapio Corpainan, the CFO.

Tapio Korpeinen
UPM-Kymmene Oyj - Chief Financial Officer, Executive Vice President - UPM Energy, Member of the Group Executive Team

Hi to everyone on the line.

Massimo Reynaudo
UPM-Kymmene Oyj - President, Chief Executive Officer, Member of the Group Executive Team

Together we will illustrate the main elements of the UPM performance last quarter and year to-date. Let me start with the key elements that characterize the quarter. Our Q3 results improved both year on year and quarter on quarter, with a good contribution from the fully ramped up Paso de los Toros pulp mill.

The earnings improvement, albeit good, was lower than earlier expected, as the market demand of our products slowed down after a strong start of the year. In this slower

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