UPM Half Year Financial Report 2022:
UPM delivers record Q2 earnings with successful margin management in exceptional business environment
Q2 2022 highlights
- Sales increased by 7% to EUR 2,562 million (2,384 million in Q2 2021)
- Comparable EBIT grew by 26% to EUR 387 million, 15.1% of sales (307 million, 12.9%)
- Operating cash flow was EUR -879 million (308 million), impacted by cash flows from energy hedges. Other operating cash flows were largely as expected
- The rise in energy futures prices was unprecedented, as was the related short-term cash flow impact from energy hedges. Respectively, it indicates strong earnings potential of UPM Energy
- Sales prices increased in all business areas and more than offset the negative impact of higher variable costs
- Cash funds and unused committed credit facilities totalled EUR 1.5 billion at the end of Q2 2022
- Transformative growth projects in Uruguay and in Germany proceed well
- In May, UPM announced the acquisition of AMC AG to accelerate growth and enter new product segments in UPM Raflatac
- In June, UPM announced the sale of the Steyrermühl site in Austria to secure competitiveness and adapt newsprint production to the long-term market development
H1 2022 highlights
- Sales increased by 10% to EUR 5,069 million (4,618 million in H1 2021)
- Comparable EBIT increased by 13% to EUR 664 million (586 million), and was 13.1% (12.7%) of sales
- Operating cash flow was EUR -867 million (526 million), impacted by cash flows from energy hedges in the highly exceptional energy markets
- Net debt increased to EUR 2,688 million (750 million) and net debt to EBITDA ratio was 1.42 (0.49). A significant part of the increase in net debt is temporary, due to the cash flow impacts of energy hedges and future energy generation
- UPM decided to suspend its deliveries to Russia, purchasing of wood in Russia and the UPM Chudovo plywood mill operations
- The strike in Finland affected production and delivery volumes especially in the pulp, paper and biofuels businesses. Estimated full-year earnings impact is not material
- In April, UPM and Paperworkers’ Union agreed on first-ever business-specific collective labour agreements and the strike ended at UPM mills in Finland
