UPM’s timber division’s profits halve in 2012

Sales in the division, including sawn timber and further processed products, grew 2% to €1.69bn (2011: €1.65bn).

The company said its fixed costs decreased significantly but it also experienced a decrease in sawn timber prices. Sawn timber deliveries totalled 1.69 million m3 for the year (2011: 1.68 million m3).

The plywood division recorded operating profits of €3m, compared to breakeven a year ago, while sales grew 3% to €387m. Demand in industrial applications was slightly stronger, while overall market decline was led by construction-related end uses.

The UPM group posted a big pre-tax loss of €1.4bn (2011: €417m profit), due mainly to impairment charges of €1.77bn in the paper division. Earning before interest, tax, depreciation and amortisation (EBITDA) was €1.26bn (2011: €1.38bn

In 2012 UPM restructured its sawn timber and further processing operations in Finland. This included the sale of the Kajaani sawmill, the closure of the Aureskoski and Heinola further processing millls and putting the Pestovo mill up for sale.

The group expects economic growth to remain very low in the early part of 2013. UPM CEO Jussi Pesonen said UPM’s financial position remained “stable”, with profitability continuing at levels similar to 2011.