UPM finished 2015 with a strong quarter, growth projects deliver earnings
“UPM finished 2015 on a strong note. The fourth quarter was the best of the year thanks to solid business performance. The profit improvement programme exceeded its target and the growth projects started to deliver earnings. EBITDA reached a higher level than in five years and our strong cash flow drove net debt to a new record-low level. Several of our growth projects have now been completed and I’m very pleased to see that they have already contributed to the cash flow.
The UPM Kymi pulp mill expansion was a success and we reached a record-high pulp production in December. UPM Biofuels picked up steam as the year went on and reached a break-even level during the last quarter. UPM Changshu’s speciality paper machine ramp-up started well in December and UPM Raflatac’s investments have already contributed to our earnings during the second half of the year.
It is worth pointing out that much of the good performance was driven by our own actions. UPM Biorefining and UPM Raflatac were the highlights of the quarter both in terms of own profitability actions and good timing in growth projects. UPM Energy and UPM Plywood showed solid performances. UPM Paper ENA had its best quarter of 2015 thanks to continuous profit improvement actions. UPM Paper Asia’s performance was supported by own cost actions as the business faced increased regional competition.
UPM’s Board of Directors has today proposed that the dividend for the 2015 is increased to EUR 0.75 (0.70) per share which is 34% of the operating cash flow per share. I believe the Board’s proposal reflects confidence in UPM’s ability to generate growth in earnings and cash flow.
All in all, 2015 was a good year for UPM and provides a solid foundation, even in a somewhat uncertain environment in 2016. We are starting the year with a stronger balance sheet than ever. Our investment levels are decreasing and earnings and cash flow from growth projects are starting to materialise. We will maintain cost competitiveness and strive to achieve top performance in our businesses. We are confident about our prospects for 2016.”
Outlook for 2016
UPM’s profitability improved in 2015 and the improvement is expected to continue in 2016. The business performance is underpinned by the company’s growth projects and continuous cost efficiency measures.
UPM’s growth projects are expected to contribute positively to the company’s earnings in 2016, compared with 2015. UPM continues its measures to reduce variable and fixed costs also in 2016. Currencies are expected to contribute positively as hedges roll over, assuming relevant currencies stay at the same level as at the end of 2015.
