A slower recovery of deliveries in most business units and the rapid fall in pulp prices negatively impact UPM’s business performance.
Comparable Ebit in H1 2023 and for the full year are now expected to decrease from the same periods last year, UPM stated. In an earlier statement UPM announced it expected Ebit for H1 2023 to increase on the H1 2022 result, while 2023 was anticipated to be "another year of strong financial performance."
Destocking in the various product value chains has continued to hold back demand in most UPM’s businesses, resulting in slower recovery of deliveries than earlier expected. In addition, chemical pulp prices have fallen faster than predicted, towards estimated bottom-of-the-cycle price levels. Finally, as indicated earlier, UPM has high maintenance activity during Q2 2023.
In 2023, UPM’s delivery are expected to benefit from the ramp-up of UPM’s Paso de los Toros pulp mill and the OL3 nuclear power plant unit, as well as the phasing out of the destocking in the product value chains as the year progresses.
UPM continues to focus on margin management during the short-term lack of deliveries. Many variable cost items have started to decrease, as expected, although the cost benefit of lower pulp prices to UPM’s two paper businesses comes with the normal delay.