Forestry firm UPM expects higher costs weighing on second-half performance (updated)

Stora Enso Oyj

23/07/2026 10:04

Recasts first paragraph to add H2 guidance, adds context in paragraph 2; analysts comment, details on peer, share move in bullets

    July 23 (Reuters) - Finnish forestry group UPM-Kymmene UPM.HE on Thursday issued second-half profit guidance below market expectations, sending its shares lower, and warned that higher costs, maintenance shutdowns and the ramp-up of its Leuna biochemicals plant would weigh on performance.
Nordic forestry companies have been struggling since late 2022 with stubbornly high wood costs and low pulp prices, squeezing profits.
UPM expects comparable EBIT in H2 from continuing operations to be in the range of €375-€575 million
Comparable operating earnings grew 71% to €212 million ($242 million) in Q2, slightly beating the average forecast of €211 million from analysts polled by LSEG
Q2 revenue rose 0.6% to €2.36 billion from €2.34 billion a year earlier, but missed an LSEG consensus forecast of €2.45 billion

        J.P.Morgan said UPM's H2 earnings guidance is well below the broker's expectations
      
The company said improved earnings were led by strong performances in biofuels, energy and advanced materials units, while higher pulp prices and efficiency gains supported the Fibres South business in Uruguay
UPM took major steps in reshaping its portfolio during the quarter through a planned graphic paper joint venture with Sappi SAPJ.J and the proposed spin-off of its plywood business into WISA Group, CEO Massimo Reynaudo said in a statement

        The results follow weaker-than-expected Q2 earnings from Finnish peer Stora Enso STERV.HE, which warned that geopolitical and trade uncertainty could weigh on demand, supply chains and costs in Q3
      
UPM shares fell 6.6% as of 0903 GMT, on track for worst day since February 2024 
($1 = 0.8749 euros)

 (Reporting by Agnieszka Olenska, editing by Bartosz Dabrowski)
 ((Agnieszka.Olenska@thomsonreuters.com;))