Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you explain the expected quarter-on-quarter improvement, particularly in Raflatac and Energy business, and how much is driven by pricing versus volumes? Also, what are the expected energy-related refunds? A: The improvement is largely driven by seasonal factors, such as increased demand for Raflatac products during the holiday season and higher energy consumption in Finland. Pricing is harder to predict due to various influencing factors. As for energy-related refunds, they are expected to be similar to last year, but we do not provide specific numbers.
Q: How are you managing your pulp mill network given the elevated wood costs in the Nordics? A: We optimize our pulp mills in Finland and Uruguay as platforms rather than individual sites. In Finland, we focus on maximizing profitability rather than production, which may involve temporary downtimes when costs outweigh benefits. This approach allows us to manage the high wood costs effectively.
Q: What is the outlook for wood costs in Finland, and what factors could drive them down from current peak levels? A: The high wood costs in Finland are due to an imbalance between demand and supply. A structural solution is needed, either through increased supply or reduced demand. Price changes in pulp or construction materials could also alleviate some pressure.
Q: Regarding the Paso De Los Toros mill, what steps remain to reach the production cost target of $280 per ton? A: Key steps include reaching nominal capacity and completing the railway connection by year-end, which will reduce logistics costs. Continuous process optimization and potential capacity expansion beyond nominal levels will further improve costs over time.
Q: Has the stabilization in graphic paper deliveries affected UPM's market share, and will the closure of PM3 impact this further? A: While demand has stabilized after last year's decline, our focus remains on profitability rather than market share. The closure of PM3 is part of our strategy to protect profitability and generate cash, despite potential impacts on market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.