Finnish forest products giant UPM reported a strong return to growth and profitability in 2010.
The company has just announced operating profits for the year of €713m, against €270m in 2009, while pre-tax profits rose to €635m from €187m. Sales were ahead 16% at €8.9bn.
President Jussi Pesonen said that the company’s figures were boosted by recovering demand, and “global commodity price inflation”.
“With higher production volumes we were able to take full benefit of our early efficiency improvements and bring profitability back to pre-recession level. This is a remarkable achievement in the continuously challenging operating environment. Our last quarter profitability was burdened by higher than average maintenance and other costs but showed the best cash flow for the whole year,” he said.
UPM, he added, is taking a positive outlook for 2011.
“Stable demand and moderating cost inflation provide a good foundation for further profit improvement,” he said. “And economic indicators point to continued economic growth, although in the mature European and North American markets this is expected to be slow compared to robust emerging markets. This is also likely to maintain commodity prices at a high level.”
The company is forecasting operating profit this year to show further improvement and it is planning capital expenditure, excluding acquisitions, of €300m.
