Apr 26, 2012. /Lesprom Network/. UPM’s sales for 1Q 2012 were Euro 2,591 million, 10% higher than the Euro 2,356 million in 1Q 2011. Sales increased due to the Myllykoski acquisition in Paper in August 2011, as well as higher delivery volumes in other UPM businesses. EBITDA was Euro 347 million, 13.4% of sales, as the company said in a press release received by Lesprom Network. The main negative earnings drivers related to delivery volumes and decreased chemical pulp prices. Delivery volumes decreased in Paper on a comparable basis, but increased in other businesses. Sales prices increased in Paper and Label and decreased in other businesses. The net impact of sales prices was neutral on UPM’s earnings. Operating profit was Euro 155 million, 6% of sales. The operating profit excluding special items was Euro 151 million, 5.8% of sales. Profit before tax was Euro 141 million and excluding special items Euro 137 million. Interest and other financing costs net were Euro 26 million. Exchange rate and fair value gains and losses resulted in a gain of Euro 8 million (a loss of Euro 2 million). Income taxes were Euro 24 million. Special items in taxes were Euro 0 million (3 million positive). Profit for 1Q was Euro 117 million and earnings per share were Euro 0.22. Earnings per share excluding special items were Euro 0.22. Operating cash flow per share was Euro 0.40. Jussi Pesonen, President and CEO of UPM, comments the 1Q 2012: “Despite the seasonally weak 1Q, we managed to improve the profitability of our operations from the level of the second half of 2011. By decreasing costs and maintaining stable pricing across UPM businesses we were able to improve our performance. We were also able to maintain a solid cash flow throughout the quarter. Even though the low profitability of the European paper industry as a whole is unacceptable, our paper business is heading to the right direction. The Myllykoski integration proceeded as planned and we could already see the first material cost synergies. Consolidation and the consequent streamlining of costs is the most efficient way to improve the cost competiveness of this industry. In Paper business, we prioritised margin over volumes and our total sales margin in euro terms was maintained despite decreasing deliveries. Variable costs are expected to start increasing slightly later in the year underlining the importance of our continued attention to margin management. In Pulp business profitability recovered, demonstrating the competitiveness of our pulp assets in all market conditions. Also Energy and Label businesses continued with strong performance. Our view for the first half of the year has moderately improved and therefore we estimate that the operating profit for the first half of the year excluding special items is estimated to be slightly up compared to second half of last year. During the quarter we completed the divestment of the RFID business. The sale of packaging paper to Billerud is in the regulatory process and we look forward to completing the sale in the second quarter. In April, we concluded the sale of the remaining shares of Metsä-Fibre (Botnia) completing the journey started in 2009. We are also expecting a PVO dividend payment related to the sale of Fingrid assets to materialise during the second quarter. All this will positively contribute to our balance sheet. UPM’s financial position is strong; we can maintain competitive operations and at the same time implement growth initiatives,” says Pesonen. UPM comprises of three Business Groups: Energy and pulp, Paper, and Engineered materials. UPM has production plants in 16 countries and it employs approximately 24,000 people worldwide.