Twin Rivers Paper Company recently completed a series of upgrades to its No. 7 Paper Machine, enhancing the overall quality, efficiency and capabilities of a machine instrumental to manufacturing products supporting the specialty packaging, publishing, and label markets. Key enhancements include an upgraded size press, improved coating flexibility, installation of a dandy roll, and slitter/rewinder modifications. The end result is a more capable asset that is well positioned to produce a diverse range of products including grease resistant packaging papers; lightweight opaque papers used for pharmaceutical, financial and religious publishing; and base papers used in a variety of label applications.
Jussi Pesonen, President and CEO comments on the results: “Our second quarter showed good progress, our operating profit improved year-on-year and our operating cash flow was strong. Overall, the Group results were supported by our profit improvement programmes, particularly visible as lower variable costs.
UPM Biorefining, UPM Raflatac, UPM Plywood and UPM Paper Asia enjoyed favourable market conditions and achieved good performance. I’m pleased that we have ongoing growth projects in all of these businesses. Considering the current electricity markets UPM Energy made a fair result, mainly due to increased hydro power volumes.
Currency development had an overall positive impact on our Group results but affected our businesses differently. The positive currency impact supported the UPM Biorefining business, whereas the corresponding negative impact of currency hedges affected UPM Paper ENA and UPM Paper Asia. Strong pulp price development in euros boosted UPM Biorefining results but increased costs in our paper businesses.
During the second quarter, our UPM BioVerno renewable diesel was introduced to Finnish consumers, UPM Raflatac’s investments in APAC and in Poland were completed and a EUR 50 million investment was started at UPM Kaukas pulp mill in Lappeenranta, Finland. These, together with ongoing investments at the UPM Kymi pulp mill, Otepää plywood mill and UPM Changshu paper mill, will support profit growth in the upcoming quarters.
Overall, I remain confident about the continuing profit improvement programme and the ongoing growth projects. UPM continues to be well-positioned for earnings growth”.
Q2 2015 compared with Q2 2014
• Earnings per share excluding special items were EUR 0.33 (0.26), and reported EUR 0.30 (0.25)
• Operating profit excluding special items increased to EUR 227 million, 8.9% of sales (186 million, 7.6% of sales)
• Profitability was underpinned by profit improvement actions and favourable exchange rates
• In Q2 2015, the profit improvement programme progressed well, reaching a cost reduction impact of EUR 27 million (annualised EUR 108 million)
• Operating cash flow was strong at EUR 324 million (215 million)
Q1–Q2 2015 compared with Q1–Q2 2014
• Earnings per share excluding special items were EUR 0.62 (0.53), and reported EUR 0.59 (0.61)
• Operating profit excluding special items increased to EUR 431 million, 8.6% of sales (382 million, 7.8% of sales)
• UPM started commercial deliveries of advanced renewable diesel and completed the UPM Raflatac expansions in Poland and APAC
• UPM invests in the top-performing plywood and pulp businesses by expanding the Otepää plywood mill in Estonia and improving efficiency in the UPM Kaukas pulp mill
• UPM closed 800,000 tonnes of graphic paper production capacity in Europe