The Helsinki-headquartered forestry and biomaterials giant posted record results last year, and had previously expected to turn in another strong performance in 2023. 

However, UPM said that destocking across various product value chains had “continued to hold back delivery volumes” across most of its businesses. 

Chemical pulp prices have “fallen faster than expected, towards estimated bottom-of-the-cycle price levels”.

The €11.7bn (£10.2bn) turnover group also has a substantial amount of maintenance work scheduled for Q2 2023. 

It stated: “UPM continues to focus on margin management during the short-term lack of volumes. Many variable cost items have started to decrease, as expected, although the cost benefit of lower pulp prices to UPM’s two paper businesses comes with the normal delay.”

UPM’s four existing pulp mills have annual production capacity of 3.7m tonnes. Its fifth, the new Paso de los Toros eucalyptus pulp mill in Uruguay started up last month and will increase the group’s pulp capacity by more than 50%. The greenfield mill involved an investment of $3.47bn (£2.77bn).

UPM’s share price fell from €30.28 to €29.52 on the news (52-week high: €37.14, low: €28.28).