Moody's raised its outlook on UPM-Kymmene Oyj to positive from stable, citing the Finland-based paper products manufacturer's healthy operating performance through 2018.
Despite weakening demand for graphic-grade paper in mature markets, the company was able to improve its EBITDA margin and maintain its strong free cash flow generation, according to the rating agency.
"Today's action reflects UPM's continued track record of solid operating performance leading to further deleveraging, supported by our expectation of continued financial discipline, which increases the likelihood that UPM will be able to sustain credit metrics that are commensurate with a higher rating also at times of elevated investments and a potential slow-down of macroeconomic growth," said Martin Fujerik, Moody's lead UPM analyst.
As part of the ratings action, Moody's affirmed the company's Baa2 issuer rating.
UPM-Kymmene in October reported profit attributable to its owners totaling €328 million, or 61 cents per share, in the third quarter, up from €286 million, or 54 cents per share, in the year-ago period.