Link: UPM 4Q results — “cautious outlook and dividend caution”
(Helsinki, Jan. 31, 2017) A cautious outlook and dividend disappointment knocked shares in Finnish pulp and paper maker UPM-Kymmene on Tuesday, despite it notching up record profits for 2016.
UPM has so far protected its profitability with cost cuts as well as its focus on pulp, a product with a brighter outlook than paper. Pulp is also used to make tissue and packaging board, which are seeing growing demand, particularly from China.
For this year, UPM said it expected profitability to “remain on a good level”, which investors took as a sign of a halt in earnings growth and hit the company’s shares.
“2016 was an excellent year for them. But it will be a difficult task to improve profitability from here, with the current business portfolio,” said Inderes analyst Antti Viljakainen, with a “reduce” rating on the stock.
In a sign of the shift in its business, during the fourth quarter UPM expanded its pulp production capacity in Finland, while announcing plans to close paper capacity in Germany and Austria.
To read complete report Go To: Paper maker UPM shares fall on outlook and dividend caution (Source: Reuters)
