HELSINKI (News release) -- UPM-Kymmene reported a 47% decline in comparable EBIT to Euro 153 million in the third quarter of 2025 as weak global pulp and paper demand and elevated wood costs continued to pressure earnings. Group sales fell to Euro 2.3 billion, down from Euro 2.5 billion a year earlier.

In the wood-based Fibres business, the company's performance was uneven between regions. The Fibres South division, which includes pulp operations in Uruguay, recorded a comparable EBIT of Euro 80 million, or 22% of sales, supported by efficient logistics and stable output. Fibres North, based in Finland, posted a comparable EBIT loss of Euro 37 million as high wood costs and a prolonged maintenance shutdown at the Kaukas pulp mill reduced production.

Average pulp delivery prices in Europe were 23% lower than in the same quarter last year. The market price for northern bleached softwood kraft pulp fell 12%, and for bleached hardwood kraft pulp 29%. In China, prices declined 11% and 22% respectively. Pulp deliveries rose to 1.26 million tonnes from 1.19 million tonnes in the previous quarter.

Wood costs in Finland remained near record highs but showed early signs of easing. To strengthen long-term supply, UPM formed a strategic partnership with Versowood, Finland's largest private timber producer. The deal includes the sale of UPM's Korkeakoski sawmill and ensures stable pulpwood and by-product supply to its mills.

UPM Plywood delivered 110 thousand cubic meters in the quarter, compared with 139 thousand cubic meters in Q2, generating sales of Euro 98 million and a comparable EBIT of Euro 10 million, or 10% of sales. Demand for birch plywood in industrial and LNG applications remained strong, while spruce plywood demand was steady in Europe.

The company's energy business offset part of the decline as Nordic electricity prices rose 44% year-on-year to Euro 40.4 per MWh. UPM's average electricity sales price increased 17% to Euro 48.8 per MWh, improving results for UPM Energy.

Operating cash flow totaled Euro 218 million, and net debt reached Euro 3.2 billion, equal to a net debt-to-EBITDA ratio of 2.36.

For the second half of 2025, UPM forecasts comparable EBIT between Euro 425 million and 650 million, down from Euro 709 million in H2 2024. The company expects continued margin pressure from low pulp prices and reduced paper deliveries, partly offset by lower variable costs and stable performance in advanced materials and energy.

UPM stated that global trade uncertainty, currency fluctuations, and geopolitical factors remain key risks for pulp, paper, and wood markets.