Pre-tax profits at UPM declined to €292m in 2007 from €367m a year ago, the company has announced.
UPM said an “unexpectedly sharp” increase in wood and fibre costs, coupled with a strong euro, were factors that hit profits during the year.
Group sales were €10bn, almost exactlly the same as 2006.
The wood products division’s profitability improved slightly during the past 12 months, with birch plywood demand strong, spruce plywood markets maintaining a “good balance” and plywood prices increasing.
Redwood and whitewood prices grew during the first half of 2007, with the market slowing after the summer.
UPM said its outlook for sawn timber was cautious due to existing high inventories and slowing of building activity in some of the main markets.
