Finnish pulp and paper maker UPM on Tuesday reported a 24 percent rise in second quarter profit and said it expected earnings growth in the second half of the year versus the first helped by higher prices and less maintenance.

“H2 2018 comparable EBIT is expected to be significantly higher compared with H1 2018,” it said. “Sales price increases in 2018 are expected to outweigh the increase in variable cost, compared with 2017.”

Before the report, analysts had on average forecast a full-year profit of 1.46 billion euros, compared to the reported 689 million in the first half. Second quarter comparable operating profit rose to 337 million euros ($393 million) on sales up 5 percent to 2.58 billion euros, broadly in line with market expectations.

UPM shares were up 4.8 percent at 0834 GMT.

“The market for their products is strong... there seems to be some pressure for lifting second-half market estimates,” said OP Bank analyst Henri Parkkinen who has a “hold” rating on the stock.

UPM rival Stora Enso last week missed quarterly profit expectations partly due to wood supply problems stemming from exceptionally hot and dry weather in the Nordics.

Parkkinen noted that UPM had fewer problems as it has no production in Sweden, which has suffered several wildfires.

 

Source: reuters.com

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