UPM-Kymmene Projects 2026 First-Half Earnings Between 325-525 Million Euros

Finnish forest industry leader UPM-Kymmene has emerged from its financial headwinds with a return to profitability in the fourth quarter, though the company faces a challenging operating environment characterized by subdued sales volumes. The company’s forward-looking guidance for the first half of 2026 suggests continued volatility, with projected comparable EBIT ranging from 325 million euros to 525 million euros, representing a notable contraction compared to the 413 million euros achieved in the same period last year.

2026 Outlook and Capital Allocation Strategy

Management’s confidence in the company’s long-term direction is underscored by its dividend decision. The Board of Directors has confirmed an unchanged payout of 1.50 euros per share for 2025, a declaration that carries particular weight given the payout represents 113% of comparable earnings per share. This dividend policy signals management’s conviction in UPM’s operational recovery and strategic initiatives, despite near-term pressure on earnings margins.

Fourth Quarter Performance Reveals Mixed Signals

The Q4 turnaround proved impressive on the surface level. Net profit reached 258 million euros or 0.49 euros per share, a stark reversal from the prior year’s 95 million euro loss. However, the underlying operational metrics paint a more nuanced picture. Comparable operating profit declined 15% year-on-year to 355 million euros, with the comparable EBIT margin compressing to 15.3% from 15.9% previously. Revenue pressures intensified, with quarterly sales sliding to 2.312 billion euros from 2.632 billion euros in the equivalent quarter last year.

Full-Year 2025: Margin Compression and Revenue Decline

The complete fiscal 2025 picture reflects deeper structural challenges within the forest products sector. Comparable EBIT for the full year fell 25% to 921 million euros, alongside a comparable EBITDA contraction to 382 million euros from 436 million euros. Annual revenue retreated to 9.656 billion euros from 10.339 billion euros, demonstrating demand softness across the company’s portfolio. The comparable EBITDA margin remained flat at 16.5%, though this stability masks underlying headwinds in pricing and volume dynamics.

Market Reception and Investor Implications

In Helsinki trading, UPM shares reflected modest pessimism, declining 0.55% to 23.61 euros. The market’s measured response suggests investors are weighing the dividend maintenance against the forward guidance that implies potential first-half earnings below the prior-year comparable, in millions of euros terms.