Operating profit excluding special items was Euro 196 million, 7.9% of sales. Depreciation totalled Euro 130 million.
Reported operating profit was Euro 191 million, 7.7% of sales (81 million, 3.3% of sales). Operating profit includes net charges of Euro 5 million as special items, mainly related to the closure of the UPM Docelles paper mill in France.
The increase in the fair value of biological assets net of wood harvested was Euro 12 million. Profit before tax was Euro 237 million and excluding special items Euro 176 million.
Income taxes were Euro 44 million. Special items in taxes were Euro 13 million negative.
Profit for 1Q 2014 was Euro 193 million and earnings per share were Euro 0.36. Earnings per share excluding special items were Euro 0.27.
Operating cash flow per share was Euro 0.50.
Jussi Pesonen, President and CEO comments on the result: “UPM had a strong 1Q both in terms of financial performance as well as progress in strategic initiatives.
Operating profit excluding special items increased to Euro 196 million (144 million). Consistent cost savings and improved efficiency in all of our businesses contributed to the good performance. Signs of recovering market fundamentals were also apparent in several business areas. Apart from UPM Biorefining, all businesses fared better compared to the previous quarter and last year.
We have now achieved Euro 156 million or 78% of the targeted annualised Euro 200 million cost savings. This is also visible in our result. With the current progress, we expect the full target to be reached by the end of this year.
The strong operating cash flow continued and since the beginning of the year we were again able to reduce our net debt by Euro 263 million bringing the net debt level down to Euro 2,777 million.
UPM Paper ENA (Europe and North America) has stepped up its performance steadily for a third quarter in a row which is evidence of the much improved competitiveness of our reshaped business platform. Costs are lower, decision making faster, flexibility has increased and customer focus improved. Also the decrease in the demand of graphic papers in Europe seems to have somewhat levelled off.
UPM Plywood continued on a trend of increasing profits. Having made a successful profitability turnaround with internal measures, the business is now starting to benefit from more favourable market conditions.
UPM Paper Asia, which is one of our growth businesses, continued good performance. In 1Q the development was driven primarily by decreased costs and positive delivery development especially in the labelling materials business.
UPM Raflatac is seeking further efficiency gains and growth through recent investment decisions and restructuring plans. The first quarter was slightly better compared to previous quarter and last year, but the business still aims to improve performance further.
In UPM Energy, the profitability was good. Energy benefitted from decreased costs, successful hedging and improved hydropower generation in 1Q.
Also in UPM Biorefining the profitability remained on a good level. In pulp business, which makes the most of the Biorefining result, demand trend remained stable but profitability was negatively impacted by adverse currency development and Kaukas pulp mill maintenance shut down,” said Pesonen.
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 Europe and North America and UPM Plywood.