In This Article:
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Comparable EBIT Increase: 21% increase for the full year 2024.
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Q4 Sales Growth: 4% year-on-year increase.
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Q4 Comparable EBIT: 29% increase year-on-year, totaling EUR418 million.
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Operating Cash Flow: EUR570 million in Q4.
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Fixed Cost Reduction: EUR103 million reduction compared to the previous year.
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Net Debt-to-EBITDA Ratio: 1.66 times at year-end.
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Cash Funds and Credit Facilities: EUR3.2 billion.
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Dividend Proposal: EUR1.50 per share for 2024.
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Share Buyback Program: Maximum of 6 million shares, up to EUR160 million.
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Impairments: EUR113 million on Finnish operations goodwill; EUR373 million on Leuna biorefinery assets.
Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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UPM-Kymmene Oyj (UPMKF) reported a 21% increase in comparable EBIT for the full year 2024, driven by strong contributions from the Paso de los Toros pulp mill and improved advanced material deliveries.
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The company achieved a 4% year-on-year sales growth in Q4 2024, with a 29% increase in comparable EBIT compared to the same period in 2023.
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UPM-Kymmene Oyj (UPMKF) implemented significant cost-saving measures, reducing fixed costs by EUR103 million compared to the previous year.
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The company maintained a strong financial position with a net debt-to-EBITDA ratio of 1.66 times and cash funds and committed credit facilities totaling EUR3.2 billion.
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UPM-Kymmene Oyj (UPMKF) announced a share buyback program, with a maximum of 6 million shares to be repurchased, complementing an unchanged dividend of EUR1.50 per share for 2024.
Negative Points
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The recovery in demand slowed down in the second half of 2024, impacting overall performance.
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Average pulp selling prices decreased by 11% in Q4 2024, negatively affecting EBIT.
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The company made an impairment of EUR113 million on goodwill in Finnish operations due to increased wood costs.
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UPM-Kymmene Oyj (UPMKF) faced a significant impairment of EUR373 million in the Leuna biorefinery assets due to cost overruns and construction delays.
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The biofuels and biochemicals segments had a significant negative impact on the 2025 bottom line, with biofuels affected by a downturn in advanced fuels markets.
Q & A Highlights
Q: Can you provide insights on the Leuna biorefinery's ramp-up and its impact on future investments, such as in Rotterdam? A: Massimo Reynaudo, CEO, explained that the Leuna biorefinery's ramp-up is on track with previous guidance, expecting full production and positive EBIT by 2027. The ramp-up process is typical for biorefineries, involving sequential start-up of different units. The experience at Leuna is separate from potential investments in Rotterdam, which will be assessed based on cost efficiency and market dynamics.