Jan 31, 2013. /Lesprom Network/. UPM’s sales for 4Q 2012 were Euro 2,650 million, 1% lower than the Euro 2,686 million in 4Q 2011. Sales decreased mainly due to a reduction in paper deliveries and prices, as the company said in a press release received by Lesprom Network. EBITDA was the same as last year, at Euro 301 million, 11.4% of sales (Euro 301 million, 11.2% of sales). Costs decreased, but this was offset by lower sales prices and deliveries, particularly in Paper. Fixed costs decreased by Euro 38 million from the previous year, while variable costs were on the same level as the previous year. 4Q operating profit excluding special items was Euro 139 million, 5.2% of sales (147 million, 5.5%). Reported operating loss was Euro 1,666 million (profit of Euro 131 million, 4.9% of sales). Operating loss includes net charges totalling Euro 1,805 million as special items. Impairment charges of Euro 1,771 million were booked in Paper, including Euro 783 million related to goodwill and Euro 988 million related to fixed assets in European graphic paper operations. In addition, special items in Paper include other impairment charges of Euro 8 million and other restructuring charges of Euro 21 million. Restructuring charges of Euro 1 million were recorded in Label, Euro 1 million in Forest and Timber, and Euro 3 million in Other operations. Sales in full year 2012 were Euro 10,438 million, 4% higher than the Euro 10,068 million in 2011. Sales increased mainly due to higher external sales in Pulp and Energy business areas. EBITDA was Euro 1,269 million, 12.2% of sales (1,383 million, 13.7% of sales). The main negative earnings drivers related to paper delivery volumes and decreased sales prices in Paper and Pulp business areas. Fixed costs were Euro 97 million lower than the previous year, on a comparable basis. Variable costs were slightly lower than the previous year, mainly due to lower fibre and energy costs. Other variable costs were higher than the previous year. Operating profit excluding special items was Euro 530 million, 5.1% of sales (682 million, 6.8%). Reported operating loss was Euro 1,350 million (profit of Euro 459 million, 4.6% of sales). Operating loss included net charges totalling Euro 1,880 million (Euro 223 million) as special items. In Energy, special items of Euro -6 million relate to an adjustment in UPM’s share of the capital gain from the Fingrid sale that was booked in 2011. In Forest and Timber, an impairment charge of Euro 31 million and restructuring charges of Euro 17 million were booked. Impairment charges of Euro 1,771 million were booked in Paper, including Euro 783 million related to goodwill and Euro 988 million related to fixed assets in European graphic paper operations. In addition, special items in Paper include other impairment charges of Euro 8 million, restructuring charges of Euro 80 million and a net gain of Euro 35 million from the sale of the packaging paper operations. In Label, restructuring charges of Euro 3 million were recognised. In Other operations, special items amounted to a net income of Euro 1 million. Jussi Pesonen comments on the full year 2012: “In 2012, UPM’s financial position remained stable. The profitability of our businesses continued at similar level as in 2011, UPM EBITDA for the full year was slightly lower, and the operating cash flow remained strong. The 4Q result was well in line with the comparison periods and the cash flow was strong. During the year, we were able to reduce our net debt by Euro 582 million. Considering the volatile economic environment last year, this is a noteworthy achievement. With respect to our growth businesses, Energy was an outstanding performer. Additionally, Pulp and Label as well as UPM’s paper business in Asia continued to perform well. For Pulp, the decrease in market prices meant a clear decrease in the operating profit, however. In other businesses, the earnings development was positive in spite of the challenging economic environment. However, the profitability of the Paper Business Group overall was weak, although healthy cash flow continued. Paper was able to markedly reduce costs and improve its cost structure, but particularly in Europe the decrease in market prices and lower delivery volumes undermined the profit improvement potential of the business. The imbalance of demand and supply in the European graphic paper markets is tempting some to short-sighted activity. The margins are squeezed to a level which are unsustainable in light of the industry cost structures. We, however, aim to secure our cash flow. Therefore UPM’s restructuring measures of last year and plans of this year are unfortunate but inevitable. UPM has a strong and versatile business portfolio with profitable businesses which we continue to grow with measured steps. In Paper, we work hard to maintain our strong cash flow. The Board’s dividend proposal of Euro 0.60 indicates confidence in the positive development of UPM’s operative cash flow and earnings. Although the markets have suffered from uncertainties in the world economy, we made steady steps forward in our Biofore strategy in 2012. Pulp has experienced a very positive development, with growing customer segments and markets. The construction of the Lappeenranta wood-based biodiesel refinery is proceeding according to plan. The uncoated woodfree speciality paper investment in China is also going ahead, while the Label business is growing both in specialty products and in emerging markets . What is more, our innovation activity has continued and materials efficiency has improved in all of our businesses”, says Pesonen. The Board of Directors proposes to the Annual General Meeting, to be held on 4 April 2013, that a dividend of Euro 0,60 per share be paid in respect of the 2012 financial year on 19 April 2013. The dividend will be paid to a shareholder registered in the Company’s shareholders’ register held by Euroclear Finland Ltd on the record date for dividend payment being 9 April 2013. UPM’s business is divided into three business areas: Energy and Pulp, Paper and Engineered Materials. UPM employs approximately 22 000 people and has production plants in 17 countries.