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Finland's UPM swings to 3Q net loss

Finland's UPM swings to 3Q net loss

Finland's UPM-Kymmene Corp., the world-leading producer of magazine paper, on Tuesday said it swung to a third-quarter net loss due to one-time charges related to plant closures, but still posted a better-than-expected result.
Net loss in the three months ended Sept. 30 came to 86 million euros ($110 million), compared with a previous profit of 120 million euros in the same quarter last year.
Charges amounting to 256 million euros ($320 million) dragged the result down and included a goodwill charge in its newsprint division and a smaller fixed asset charge in its wood products unit.
Third-quarter sales fell to 2.36 billion euros ($2.95 billion) from 2.5 billion in the same three months in 2007, but costs improved somewhat, reaching around 2 billion euros ($2.5 billion) in the quarter from the previous 2.1 billion euros recorded in the corresponding period last year.
The share jumped 4.5 percent to 10.8 euros ($13.5) on the Helsinki stock exchange as market watchers said the results were better than hoped thanks to pleasing earnings in its energy unit and good performance in some of its associated companies.
In its outlook for the year, however, UPM said European paper demand is expected to be lower than in 2007 and that the fall in North American demand continues, while it is also growing weaker in China.
In the fourth quarter UPM's paper deliveries are also expected to fall by more than 200,000 tons compared with last year, but the average paper price in euros is expected to be unchanged from this quarter. It also warned that costs of wood raw material and wood fiber are expected to stay high.
In September, UPM announced it would slash around 1,600 jobs in 2009 and 2010, and close some mills in Finland. The company has said streamlining measures would save it 70 million euros ($88 million) in fixed costs.
UPM has production plants in 14 countries with 170 sales and distribution companies worldwide. It employs some 25,500 people, down from around 29,000 a year ago.


Updated : 2021-04-17 23:42 GMT+08:00