Finnish pulp, paper and timber manufacturer UPM-Kymmene’s (OMX: UPM1V) report did not show as fast earnings decline as had been feared. Sales of nearly 2.6 billion Euros in Q1 is a few percentage points less than in the previous quarter but operating profit of 155 million is somewhat higher. Year-on-year operating margin is however down from 8.4 to 5.8%. Net profit of 117 million means an EPS (both reported and ex special items) of 22 cents.
Cost synergies from Myllykoski acquisition were starting to show. Overall the cost side development was mixed. UPM expects global economic growth to continue in 2012 with uncertainty mainly in Europe. UPM’s own operations seem to be stable. Operating profit in H2 2012 should slightly best H2 2011. Shareholders liked what they saw and drove up the the stock market price by more than 5%.
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