• Interfor generated $205.0 million of cash flow from operations before changes in working capital, or $3.07 per share, and an additional $24.9 million of cash from reduced working capital. • Capital spending was $36.0 million, including $21.7 million on high-return discretionary projects primarily in the U.S. South. US$96.1 million has been spent on the Company’s Phase II strategic capital plan through December 31, 2020. • Net debt ended the quarter at $(75.4) million, or (7.5)% of invested capital, resulting in available liquidity of $787.5 million.
Jussi Pesonen, President and CEO, comments on the Q2 results: “UPM delivered a very good second quarter, and rapid recovery of our earnings continued. In the exceptional economic environment, demand for UPM’s products was strong, and overall, our price increases more than offset rising input costs. At the same time, our transformative growth projects continued on schedule and on budget, and we are in an excellent position going forwards.
Our Q2 sales increased by 15% to EUR 2,384 million, and comparable EBIT was up by 51% rising to EUR 307 million from the lockdown affected Q2 of last year. Operating cash flow increased to EUR 308 million. Net debt at the end of June was EUR 750 million, and our financial position remains strong with EUR 2.5 billion in cash funds and unused committed credit facilities.
The most notable improvement was seen in UPM Biorefining, where pulp and sawn timber prices soared, and the business area made its best second quarter ever. Result was held back by the scheduled maintenance shutdown at the Fray Bentos pulp mill in Uruguay, and a shutdown due to a fire at the Lappeenranta biorefinery in Finland.
Strong markets and good profitability continued for UPM Raflatac and UPM Specialty Papers as recent trends in consumer behaviour, e-commerce and retail prevailed. Labelling materials and specialty papers comprise nearly a third of our sales. Once again, UPM Raflatac had a great quarter, despite exceptional pressure on input costs. These excellent results are not only due to strong market demand but also agile margin and mix management, as well as unrelenting focus on efficiency.
Demand for graphic papers in Europe increased 28% compared to Q2 of last year, which was affected by lockdowns. Strong demand and the timely efficiency measures taken last year resulted in good asset utilisation rates. In terms of profit the quarter was very challenging for UPM Communication Papers due to rapidly rising input costs and market prices for publication papers based on January contracts. The sale of the UPM Shotton paper mill was announced in May and will be completed during Q3.
All in all, throughout Q2 we were able to run our businesses successfully in the rapidly changing market environment, marked by rising prices and demand. More importantly, I am confident that our Biofore strategy is creating long-term value in a world where consumers, businesses and governments are actively looking for sustainable solutions.”