UPM’s Interim Review for January-March 2004: Demand positive, profitability weak as expected

Key figures:

- Profit before non-recurring items EUR 63 million (1-3/2003: 135)
- Earnings per share excluding non-recurring items EUR 0.09 (0.18)
- Sales EUR 2,451 million (2,423)
- Gearing ratio 75% (82)
- Paper deliveries up by 10%

President and CEO Jussi Pesonen comments on the first quarter of the year:

"UPM deliveries increased in all paper grades, but the profitability of the company was weak as anticipated. The most important reason was the continuing weak price level in the paper markets. We are determined to improve cost efficiency adopting all possible measures and our cost savings programme has made very positive progress."

"On a positive note, with increased demand UPM has strengthened its position in the markets and the order inflow is good. With demand still strengthening, there is a good possibility for prices to rise."

"The rationalisation measures, improved efficiency and well developing markets have improved the result of the Converting division considerably. In label papers, the demand developed very well, which facilitated today's investment decision in release base paper at Tervasaari mill in Finland."

"Paper deliveries are expected to remain on the same good level as during the first quarter. In Europe, paper prices are not expected to change considerably. In North America, prices are expected to rise gradually. The markets for converted products are expected to continue to develop favourably. In wood products, especially in sawn goods, the oversupply will continue," said Mr Pesonen.


For more information, please contact:
Mr Jussi Pesonen, President and CEO, UPM-Kymmene Corporation, tel. +358 204 15 0001
Mr Kari Toikka, Executive Vice President and CFO, tel. +358 204 15 0014

UPM
Corporate Communications
April 27, 2004

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Webcasting and Conference Call Information

The news conference regarding the Interim Review will be broadcast on-line at UPM's website www.upm-kymmene.com today at 13:30 Finnish time (11:30 UK Time). The reply of the news conference will be available for next 3 months.

To participate in the UPM Conference Call, please dial +44 (0) 1452 542 300 at 17:00 (Finnish time) (15:00 UK Time) on April 27, 2004. Call title: UPM-Kymmene Q1 Interim Review Conference Call. The Conference Call reply will be available until May 4, 2004 at the following phone number: +44 (0) 1452 55 0000, access code: 1219135#.

In the United States and Canada the Conference Call number is +1 866 220 1452. The reply will be heard at the following number +1 866 247 4222, access code: 1219135#.