Aug 04, 2010. /Lesprom Network/. For the 2Q, UPM had net profits of Euro 181 million versus a Euro 26 million loss for the comparable 2009 period. Through June 30, UPM’s net profit was Euro 263 million versus a Euro 188 million loss during the first half of 2009, as Business North reported. Despite an increase in sales and paper deliveries, UPM reported a Euro 61 million quarterly operating loss in its paper sector. The company attributed the loss to a simultaneous rise in fiber prices coupled with a decrease in paper prices when compared with the first half of 2009. Jussi Pesonen, UPM President and CEO, comments on the result for the 2Q 2010: "UPM's profit recovery in the 2Q was encouraging. Increased economic activity improved all of our business. Demand continued to pick up, and our sales grew by 20% from last year. Our sales prices in most businesses were higher than in the first quarter of the year. We anticipate this positive development to continue in the second half of the year. The EBITDA for the 2Q was significantly improved from the same period last year due to higher delivery volumes and the inclusion of the Uruguayan operations. When delivery volumes increase, we clearly see the benefits of the cost efficiency achieved in recent years. However, in the 2Q, cost pressure started to intensify alongside the increased economic activity. Costs of raw materials increased, resulting in higher variable costs. Cost pressure will continue in the second half of the year. Therefore, we must continue with tight cost control in all of our activities. The Energy and Pulp businesses have developed well. We are satisfied with the current transparent structure of the Pulp business. Our cost competitive pulp mills in Uruguay and Finland have been able to benefit from the strong pulp market. In July, The Finnish parliament's ratification of the favourable decision-in-principle concerning the application by Teollisuuden Voima (TVO) to construct its fourth nuclear power plant unit, Olkiluoto 4, is a positive step for UPM. The decision opens up the possibility to increase the share of low-emission and cost efficient electricity. For Paper, deliveries increased in all markets, especially in Asia and North America. Despite of the good cost performance, the Paper business made an operating loss due to significantly higher fibre costs and lower prices than last year. To improve the profitability of Paper, we have increased prices practically in all new contracts. The profitability of Label business improved significantly from last year due to increased deliveries especially in Asia and Eastern Europe. The current structure of the Label business area provides a good competitive edge in the market. In the 2Q, Label business was able to compensate with higher prices for the considerable increase in raw material costs. In the second half of the year, prices are expected to be higher but intense cost pressure will challenge current sales margins. Despite the expected material increase in variable costs, we estimate the operating profit excluding special items for the second half of 2010 to be higher than in the first half of the year", says Pesonen.