Finland's UPM beats forecasts as pulp, timber and biofuels surge

While other business units remained stable or grew slightly, UPM's Biorefining unit, producing pulp, timber and biofuels, saw its sales grow 18% to 714 million euros ($842.16 million) and operating profit 211% to 190 million euros. "The most notable improvement was seen in UPM Biorefining where pulp and sawn timber prices soared, and the business area had its best second quarter ever," Chief Executive Jussi Pesonen said in a statement.

Finland's UPM on Thursday posted a bigger-than-expected rise in second-quarter operating profit, after its pulp, timber, and biofuels division put in its best performance yet.

UPM's share price rose 1.5% to 33.4 euros by 0719 GMT, outperforming the broader market. While other business units remained stable or grew slightly, UPM's Biorefining unit, producing pulp, timber, and biofuels, saw its sales grow 18% to 714 million euros ($842.16 million) and operating profit 211% to 190 million euros.

"The most notable improvement was seen in UPM Biorefining where pulp and sawn timber prices soared, and the business area had its best second quarter ever," Chief Executive Jussi Pesonen said in a statement. UPM's operating profit rose to 304 million euros from 148 million and beat the 274.5 million mean estimate from eight analysts polled by Refinitiv.

Increased demand lifted second-quarter sales at UPM's paper unit by 6% to 867 million euros but the unit made a loss of 14 million following lower sales prices and higher costs. UPM said it expects pulp and graphic paper prices to continue rising and for its 2021 comparable operating profit to be clearly higher than in 2020.

The company added it plans to offset rising costs with higher prices. UPM's results echo its domestic peer Stora Enso, which on Wednesday reported a bigger-than-expected jump in second-quarter core earnings but saw its paper business fall to a loss despite stable sales. ($1 = 0.8478 euros)