Finnish forest products group UPM’s comparable EBIT from continuing operations fell 8% to Euro 131 million in the third quarter from Euro 142 million a year earlier as customer destocking reduced deliveries and variable costs increased. Sales declined 1% to Euro 2.2 billion, while operating cash flow rose to Euro 420 million from Euro 218 million, UPM said.
Customer destocking was significant in some markets, particularly in Europe, as broader global uncertainty and high energy costs made customers more cautious. Higher sales prices more than offset the increase in variable costs, while fixed costs decreased by Euro 16 million. UPM Communication Papers faced weaker graphic-paper demand and overcapacity, which limited its ability to pass through higher energy costs.
UPM expects comparable EBIT from continuing operations in the second half of 2026 to range approximately from Euro 375 million to Euro 575 million, compared with Euro 479 million in the second half of 2025 and Euro 471 million in the first half of 2026. Compared with the first half, delivery volumes are expected to be lower, sales prices moderately higher and variable costs higher. Energy refunds are expected to support Communication Papers’ fourth-quarter result, although the benefit is expected to be smaller than in 2025. UPM said significant uncertainties remain in geopolitics and trade.
Maintenance activity is expected to increase from the comparison period. The production ramp-up at the Leuna biorefinery is expected to increase costs moderately. UPM expects higher sales prices to support performance in the second half compared with the same period of 2025, while variable costs are expected to increase. The fair-value change of forest assets is expected to have a significantly smaller effect on comparable EBIT than in the second half of 2025, when it was Euro 131 million.
“Destocking is still going on in some markets but is temporary by nature,” said Massimo Reynaudo, President and CEO, in a statement. UPM plans to continue margin-management actions across its businesses.
UPM Fibres’ results improved. Production at the Kaukas pulp mill in Finland was curtailed for eight weeks to optimize production and wood sourcing and ensure profitability in challenging softwood pulp markets. Demand and market prices for pulp increased moderately after the seasonally slower summer. UPM plans a five-week curtailment at the Pietarsaari mill in the fourth quarter.
The Leuna biorefinery in Germany reached production readiness for Renewable Functional Fillers, and UPM said customer qualification volumes would be produced in the fourth quarter. Customer deliveries range from industrial sugars through lignin-derived specialty chemicals to Renewable Functional Fillers. Two of the three core processes have been tested and are in production. Specific modifications were identified during commissioning of the process converting sugars to glycols, and UPM expects integrated production to start in the second quarter of 2027. UPM expects to reach nominal capacity in early 2028.
The maintenance schedule includes the OL3 nuclear power unit in the third and fourth quarters of 2026, the Paso de los Toros pulp mill in the fourth quarter of 2026, and OL1 and OL2, the Fray Bentos pulp mill, the Kymi pulp mill and the Lappeenranta biorefinery turnaround in the second quarter of 2027. The Kaukas pulp mill is scheduled for maintenance in the third quarter of 2027. UPM also plans to separate its Plywood business into WISA Group Plc, which was planned to start trading on Nasdaq Helsinki in November. Preparations for a planned graphic-paper joint venture with Sappi progressed, but the European Commission restated serious concerns in early October and UPM opened discussions on potential remedies.