Finnish forestry product firm UPM reported a larger than anticipated drop in profits in its third quarter.
The company said its profits fell to 215 million euros during Q3, compared with 342 million in profit a year ago. Net sales decreased by 19 percent to two billion euros, due to a decline in deliveries of paper as well as lower pulp and paper prices.
Jussi Pesonen, UPM's president and CEO, said the company's performance was satisfactory in light of the coronavirus crisis.
"During Q3 we delivered on many fronts: performance, cost reduction actions, transformative projects as well as the safety and health of our personnel. We are taking action to ensure competitiveness, and our businesses delivered satisfactory performance under the highly exceptional circumstances resulting from the Covid-19 pandemic," Pesonen said in a statement.
Firm's job cuts, closures
"During Q3, UPM took forward plans for decisive restructuring and efficiency improvement. Closing of the UPM Jyväskylä plywood mill in Finland and the UPM Chapelle paper mill in France were finalised. The decision on closing the UPM Kaipola paper mill in Finland was taken in October, and the plan to sell the UPM Shotton paper mill in Wales was announced," he said, adding that measures taken at those and other facilities would create an annual cost saving of around 130 million euros.
In August UPM announced it would shut its last remaining newsprint mill in Finland, Kaipola, with the loss of some 450 jobs.
"The implemented and announced measures are unfortunate to many UPMers, but they are nevertheless necessary to ensure performance in the short term and competitiveness in the long term. UPM is also taking measures to support transitions from job-to-job," Pesonen said.