HELSINKI (Reuters) – Finnish forestry group UPM said on Tuesday it expects 2022 comparable operating earnings to meet or exceed last year’s as it continues to raise prices and meet increasing demand.
UPM’s shares were up 2.53% at 32.4 euros after it posted strong quarterly earnings, despite a long strike putting its Finnish pulp and paper plants out of production and Russia’s invasion of Ukraine denting its profitability.
“Without the strikes UPM would have turned a mad profit,” Inderes analyst Antti Viljakainen said, with reference to an 82.3% fall in operating profit at its Fibres division.
“The result was very weak compared to the pulp market cycle,” Viljakainen told Reuters.
UPM’s Finnish pulp and paper plants were out of production for the first three months of 2022 due to a strike by the paperworkers union who opposed plans by UPM to switch to separate labour agreements for all its businesses.
These were finally approved on April 22.
UPM estimates the four-month strike to have cost it 180 to 220 million euros ($192 million-$235 million).
The forestry group’s January-March comparable operating profit was 279 million euros, 2 million below last year’s figure. The biggest adjustment item was a 95 million euro impairment from operations in Russia and Ukraine.
“The result is a good achievement when viewed against the background of the strikes that took place at most of our Finnish mills and the war in Ukraine,” UPM Chief Executive Jussi Pesonen said in a statement.
($1 = 0.9355 euros)
(Reporting by Essi Lehto and Anne Kauranen; Editing by Edmund Blair and Alexander Smith)
