UPM Q1 EBIT Beats Forecasts; Guidance Maintained

Core Earnings Highlights

UPM-Kymmene Corporation reported a first-quarter comparable EBIT of €274 million, surpassing analyst expectations of €253 million by 8%. However, this result marks a decline from the €355 million reported in the fourth quarter of 2023.

Divisional Performance Overview

The Finnish forestry company's performance was notably driven by its energy division, which generated €100 million against consensus estimates of €80 million. Furthermore, the biofuels segment recorded a loss of €26 million, which was significantly better than the expected losses of €46 million.

Outlook and Forward Guidance

UPM has maintained its EBIT guidance for the first half of 2024, forecasting a range between €325 million and €525 million. The company's outlook is constrained by anticipated higher costs in its graphic paper division and the timing of pulp mill maintenance scheduled for the second quarter. Trade and geopolitical uncertainties were also cited as factors affecting its forecast.

Summary

Despite a strong first-quarter earnings beat, UPM's unchanged guidance and acknowledged headwinds suggest a cautious outlook for the second quarter. The midpoint of the company's guidance range implies a second-quarter EBIT of approximately €151 million.

FAQ

Q: What was UPM's reported Q1 EBIT?
A: UPM reported a first-quarter comparable EBIT of €274 million, which exceeded the analyst forecast of €253 million.

Q: Did UPM change its 2024 guidance?
A: No, the company maintained its first-half 2024 EBIT guidance in the range of €325 million to €525 million.

Source: Investing.com