UPM-Kymmene's second-quarter earnings per share excluding capital gains/losses were EUR 0.49 (first quarter: EUR 0.60)

UPM-Kymmene's second quarter turnover was E 2,679 million (2,566 million in the first quarter). Second quarter earnings per share, excluding capital gains/losses, were E 0.49 (0.60). Profit be-fore extraordinary items and capital gains/losses were E 193 mil-lion (217 million). The decline in profitability was due to exchange rate losses of E 28 million on trade receivables (gains of E 3 million) and somewhat lower sales prices. Operating profit was E 265 mil-lion (284 million) excluding capital gains/losses and 9.9% of turnover (11.1). Capacity utilization rate of the Paper Industry was slightly higher, 87% in the second quarter compared to 85% in the first quarter.

UPM-Kymmene's half year turnover was up to E 5,245 million and 4% higher than during the corresponding period last year. Oper-ating profit, excluding capital gains/losses, was E 549 million (753 million) and 27% down on the previous year's corresponding figure. Profit before extraordinary items and taxes was E 406 million (629 million) and excluding capital gains/losses was E 410 million (627 million). Earnings per share, excluding capital gains/losses, were E 1.09 (1.91). Excluding capital gains/losses return on equity was 8.4% (16.0) and return on capital employed 8.8% (15.0).

"I consider second quarter earnings satisfactory in the current demanding market situation. As a matter of fact, the pretax profit of the second quarter was on the same level as that of the first quarter before the exchange rate adjustments caused by the weakened dollar and pound at the end of the period. The key financial indicators of the company, return on equity, and return on capital employed fell behind the company targets but operating profit margin was about 10% and cash flow from operations remained very strong," says Juha Niemelä, President and CEO of UPM--Kymmene Corporation.

"As forecast, operating rates were slightly higher than in the first quarter due to seasonality. Market situation has been tough but prices have remained reasonably stable. Printing paper demand has not shown clear strengthening signs so far. I expect, however, the typical seasonal pick-up in printing paper demand to take place after summer," he states.

UPM-Kymmene Corporation
Corporate Communications
30 July, 2002

Link: Interim Review January 1 - June 30, 2002