Variable and fixed costs were significantly lower than in the comparison period, both largely because of the achievements in UPM´s profit improvement programme during last year. The company’s growth projects contributed positively to 1Q 2016 comparable EBITDA, with pulp, biofuel, label paper and fine paper deliveries in Asia, as well as self-adhesive label material deliveries growing from last year.
Realised currency hedges had only a minor impact on 1Q 2016 comparable EBITDA, whereas they had a significant negative impact in the comparison period. Sales prices across UPM’s product range and markets had a negative impact on comparable EBITDA. Comparable EBIT increased by 34% to Euro 281 million, 11.5% of sales.
Operating profit totalled Euro 277 million, compared to Euro 203 million in 1Q 2015. Items affecting comparability in operating profit totalled charges of Euro 4 million.
Profit for 1Q 2016 was Euro 227 million, and comparable profit was Euro 225 million.
Jussi Pesonen, President and CEO, comments on the 1Q result:"All in all, 2016 got off to a very good start. During the first quarter, we achieved a good level of operational efficiency, we were able to lower our costs significantly and the market environment was mostly favourable. Our comparable EBIT increased by 34% year-on-year to reach a record level in years. In addition, our cash flow was particularly strong, driving net debt further down.
"The first quarter showed the full impact of last year's cost efficiency measures. Costs decreased in all businesses, but the impact was particularly visible in UPM Paper ENA's improved profitability. Our customers continued to rely on us with their business, while we improved operational efficiency significantly by closing up 800,000 tonnes of capacity.”
Through the renewing of the bio and forest industries, UPM is building a sustainable future across six business areas: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper ENA and UPM Plywood.
