UPM Reports Lower Sales but Stable Margins in Q1 2026 as Energy Business Delivers Record Performance

UPM-Kymmene Corporation reported a decline in sales and earnings for the first quarter of 2026, while maintaining stable profitability margins and benefiting from strong performance in its energy and decarbonisation-related businesses.

Group sales fell 5% year-on-year to €2,505 million, primarily due to adverse currency movements and lower prices in several business areas. Comparable EBIT decreased 5% to €274 million, with the margin holding steady at 10.9% of sales. Profit for the period increased to €200 million from €143 million in the prior-year period.

Operating cash flow declined significantly to €89 million from €289 million a year earlier, reflecting working capital changes and seasonal factors. Net debt stood at €2,962 million at the end of the quarter, with a net debt-to-EBITDA ratio of 2.30.

Performance across business areas was mixed. UPM Energy delivered record results, supported by higher electricity prices and strong winter demand, while UPM Biofuels also improved earnings. In contrast, UPM Fibres and UPM Communication Papers reported lower profitability due to declining prices and continued weak demand in paper markets.

The company continued to advance strategic initiatives during the quarter, including preparations for a planned graphic paper joint venture with Sappi Limited and ongoing investment in its biochemicals refinery in Leuna, Germany.

Chief executive Massimo Reynaudo said the company delivered a “good start to the year” despite geopolitical uncertainty, highlighting the strength of its balanced portfolio and the contribution from decarbonisation solutions.

Looking ahead, UPM expects comparable EBIT for the first half of 2026 to be in the range of €325 million to €525 million, with performance supported by moderately higher sales prices and volumes but weighed by continued weakness in communication paper markets and costs related to the ramp-up of new production assets.