UPM-Kymmene (UPM) Q2 2024 earnings summary

Executive summary

• Comparable EBIT increased by 60% year-over-year in Q2 2024 to EUR 182 million, driven by improved demand, Paso de los Toros pulp mill ramp-up, and despite high maintenance activity and political strikes in Finland.

• Sales in Q2 2024 were EUR 2,546 million, nearly flat compared to Q2 2023.

• Strategic actions included new business-specific labor agreements in Finland, planned closures of Hürth newsprint mill and Nordland Papier machine, and the acquisition of Grafityp to expand in graphics.

• UPM Biochemicals is preparing for production start at Leuna by year-end, with robust customer interest and partnerships.

• High maintenance activity and political strikes in Finland impacted H1 2024 results, but assets are now positioned for strong H2 performance.

Financial highlights

• Q2 2024 comparable EBIT was EUR 182 million (7.2% of sales), up from EUR 114 million (4.5%) in Q2 2023.

• Net debt at end of Q2 2024 was EUR 2,763 million; net debt/EBITDA at 1.64.

• Dividend payment of EUR 400 million in Q2 2024; EUR 1.50/share for 2023 paid in two instalments.

• Maintenance and strike impacts totaled EUR 180 million in H1 2024.

• H1 2024 operating cash flow was EUR 539 million, down from EUR 1,173 million in H1 2023.

Outlook and guidance

• Full-year 2024 comparable EBIT expected to increase from 2023, supported by higher volumes, Paso de los Toros ramp-up, and lower fixed costs.

• H2 2024 comparable EBIT expected to exceed H1, especially in UPM Fibres, with no major maintenance shutdowns scheduled.

• Market conditions for renewable fuels expected to remain weak; margin management and cost reduction actions ongoing.

• Energy-related refunds expected in Q4, similar to previous years.