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Finland's UPM says wage row to deliver long-term benefit

·1-min read

HELSINKI (Reuters) -UPM's chief executive on Tuesday defended a wage dispute that resulted in a four-month strike costing the Finnish forestry group up to 220 million euros ($235 million), saying it would ultimately benefit from standing its ground.

"We will make that back many times in the coming years and decades," he said, adding price increases resulting from a lack of supply during the period of industrial action could help UPM to manage its costs in future quarters.

UPM's Finnish pulp and paper plants were out of production for the first three months of 2022 due to a strike by the paperworkers union who opposed plans by UPM to switch to separate labour agreements for all its businesses.

These were finally approved on April 22.

UPM on Tuesday estimated the strike to have cost it 180 to 220 million euros ($192 million-$235 million), but said it expects 2022 comparable operating earnings to meet or exceed last year's as it raises prices and sees increasing demand.

UPM's shares were up 1.6% at 32.1 euros at 1400 GMT after it posted strong quarterly earnings, despite the wage strike and Russia's invasion of Ukraine denting its profitability.

"Without the strikes UPM would have turned a mad profit," Inderes analyst Antti Viljakainen told Reuters, with reference to an 82.3% fall in operating profit at its Fibres division.

The forestry group's January-March comparable operating profit was 279 million euros, 2 million below last year's figure. The biggest adjustment item was a 95 million euro impairment from operations in Russia and Ukraine.

($1 = 0.9365 euros)

(Reporting by Essi Lehto and Anne Kauranen; Editing by Edmund Blair and Alexander Smith)

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