UPM's Q3 2023 sales were Euro 2,584 million, 24% lower than the Euro 3,420 million in Q3 2022. Sales decreased in all business areas and the most in UPM Communication Papers business area.
Q3 2023 comparable EBIT decreased by 72% to Euro 220 million, which was 8.5% of sales (Euro 779 million, 22.8%).
Q3 2023 operating loss was Euro -29 million (operating profit Euro 781 million). Items affecting comparability in operating profit totalled Euro -249 million in the period.
Loss for Q3 2023 was Euro -28 million, and comparable profit was Euro 149 million.
January–September 2023
Q1–Q3 2023 sales were Euro 7,929 million, 7% lower than the Euro 8,489 million for Q1–Q3 2022. Sales decreased in UPM Communication Papers, UPM Raflatac, UPM Specialty Papers, UPM Energy and UPM Plywood business areas. Sales increased in UPM Fibres and in Other Operations.
Comparable EBIT decreased by 52% to Euro 689 million, 8.7% of sales.
Operating profit totalled Euro 398 million (1,299 million). Items affecting comparability in operating profit totalled EUR -292 million in the period (-144 million).
Profit for Q1–Q3 2023 was Euro 233 million, and comparable profit was Euro 507 million.
Jussi Pesonen, President and CEO, comments on the results: “This year has seen an exceptional business environment, with a downcycle well beyond normal in our industry, especially in Europe. Geopolitical uncertainty, low economic activity and persistent inflation have impacted the underlying demand for consumer products. Market deliveries of our products have been held back further by unprecedented destocking in most of the product value chains. While we believe the destocking is now phasing out, the operating environment remains uncertain, impacting customer behaviour.
In these unusual circumstances, we have focused on margin management, and implemented a range of timely cost and capacity reduction measures to maintain good performance. Meanwhile, we have been ramping up our strategic growth projects, and continue to build the foundation for future growth. In Q3, these activities started to pay off. We are well positioned to deal with a market demand recovery, and to leverage the positive long-term drivers with our growth projects.”
Outlook for 2023
Full-year 2023 comparable EBIT is expected to decrease from 2022. UPM’s comparable EBIT in H2 2023 is expected to be on similar level or increase compared to H1 2023.
UPM’s delivery volumes are expected to increase in H2 2023 from H1 2023. Deliveries were unusually low during H1 2023, held back by significant destocking in the various product value chains. Destocking is expected to gradually phase out during H2 2023, enabling UPM’s deliveries to recover towards the underlying end-use demand. The production ramp-up of the UPM Paso de los Toros pulp mill and the OL3 nuclear power plant unit will add to UPM’s deliveries in H2 2023.
Chemical pulp and electricity market prices were historically high during H2 2022 and declined rapidly to estimated bottom-of-the-cycle levels during H1 2023. H2 2023 started with low pulp and electricity prices, impacting these commodity price-driven businesses. In the other businesses UPM continues to manage margins.
Variable costs are expected to decrease in H2 2023 compared to H1 2023. In addition, UPM is implementing measures to reduce fixed and variable costs.
