HELSINKI, April 25 (Reuters) - Finnish pulp and paper company UPM reported on Tuesday a surprise rise in first quarter profit on the back of higher pulp delivery volumes.
UPM said chemical pulp demand was strong particularly in China, although its prices in the first quarter fell by 4 percent from a year ago due to increased production capacity in the pulp industry.
Total core operating profit in the quarter rose 8 percent from a year earlier to 305 million euros ($332 million), beating analysts’ average forecast of 269 million in a Reuters poll.
Shares in the company rose 4 percent in early trade.
UPM said that in the second quarter its financial results would be hurt by maintenance breaks at some of its facilities.
The company added it was planning cost cutting measures to mitigate cost inflation.
UPM is the world’s largest maker of graphic papers such as newsprint and magazine paper - products that have lost business to the internet. But the company has protected its profitability with cost cuts as well as its focus on wood pulp.
Pulp is used to make paper but also tissue and packaging board, products that are seeing growing demand, particularly in Asia.
$1 = 0.9190 euros Reporting by Jussi Rosendahl and Tuomas Forsell; Editing by Mark Potter