According to its half-year results to June 2011, UPM turned over €4.8bn (£4.2bn), up from €4.3bn in the same period last year.

Operating profit excluding special items was up from €315m to €399m year-on-year, while EBITDA rose from €641m to €751m.

UPM president and chief executive Jussi Pesonen said: "Our operating profit improved clearly during the first half of the year despite the cost pressures. We were able to offset the rise in variable costs through higher sales prices.

"Within a year we have succeeded in reducing our net debt by EUR 675m. It is testimony of a strong and solid operative cashflow."

The company completed the purchase of Myllykoski earlier this month, and Pesonen said that it gave UPM a "unique momentum for profitability improvement".

He said: "Already during the initial integration planning the merits of the transaction have been confirmed. Market demand seems to have stabilised and cost development is levelling off. In these conditions the best way to make fundamental improvements in terms of profitability is through determined consolidation and restructuring.

"The new combination offers us excellent opportunities to improve our cost competitiveness, also to the benefit of our customers. Although the transaction is an important step towards creating value in UPM’s Paper Business, it does not serve as a solution for all of the challenges faced by the industry’s players."