UPM-Kymmene - Company Announcement

UPM'S RESULT CONSISTENTLY IMPROVED, OPERATING PROFIT GREW 20 %

Interim Report January-March 2007: Earnings per share excluding special items   
for the first quarter were EUR 0.25 (EUR 0.21 for the first quarter of 2006).   
EBITDA was EUR 418 million, 16.6 % of sales (EUR 386 million, 15.7 %). Operating
profit excluding special items was EUR 221 million (EUR 185 million). New Label 
Division was formed for self-adhesive label and RFID businesses.                

Jussi Pesonen, President and CEO, comments on the result of the first quarter of
2007:                                                                           

"UPM's year has started off well. Enhanced efficiency was visible in our result 
and our operating profit grew clearly during the first quarter. The fixed costs 
decreased as planned."                                                          

"Demand for paper continued to grow. The prices of newsprint, uncoated fine     
paper and some speciality papers increased. However, the price development in   
magazine papers has been clearly disappointing. The average price for paper     
deliveries remained at the same level as last year. Our deliveries in Europe    
increased in line with the market growth."                                      

"The business environment is, however, challenging. Increase in the raw material
costs, wood and recycled fibre in particular, is weakening the profitability. In
Finland, the price of wood is now at a record high. We, however, managed to     
maintain a moderate cost inflation at 1-2 %."                                   

"There was strong growth of demand in sawn goods. Due to the realised structural
changes UPM was able to capitalise well on the market development, even though  
the availability of wood logs was a challenge. Self-adhesive label markets      
continued to develop favourably and prices remained steady."                    

"For the second quarter, demand for printing papers is forecast to grow in      
Europe from the corresponding quarter of last year, while in North America      
demand is expected to decrease. Strong growth in demand is expected to continue 
in the emerging markets. In the second quarter, we estimate our paper deliveries
to increase from last year and average price for all paper deliveries to be     
about the same as in the first quarter of 2007."                                

"Demand for self-adhesive label materials is forecast to continue to grow in all
markets, and prices are expected to remain stable. In wood products, strong     
demand for plywood and sawn timber will continue during the second quarter."    

"Increase in wood cost and possible lack of sufficient supply of wood raw       
material may result in less optimal use of capacity."                           

"The company's overall cost inflation is estimated to remain at the level of    
1-2%, including expected cost savings from the ongoing profitability programme,"
said Pesonen.                                                                   

For more information please contact:                                            
Mr Jussi Pesonen, President and CEO, UPM, tel. +358 204 15 0001                 
Mr Jyrki Salo, Executive Vice President and CFO, UPM, tel. +358 204 15 0011     

***                                                                             
News conference and conference call information:                                
A news conference on the Interim Report January-March 2007 will be held today,  
April 24, 2007, at UPM's Head Office in Helsinki, Eteläesplanadi 2, at 14:00    
Finnish time (12:00 GMT, 07:00 EST). The briefing can be followed live on the   
Internet at www.upm-kymmene.com. A recording of the briefing will be available  
at this address for the next three months.                                      

To participate in the UPM conference call, please dial +44 (0)1452 542 300 today
at 17:00 Finnish time (15:00 GMT, 10:00 EST). The conference call title is: UPM 
Q1 2007 Financial Results, access code: 5880836. A recording of the discussion  
can be heard until May 1, 2007 by calling +44 (0)1452 550 000, access code      
5880836#.                                                                       

In the United States and Canada, the Conference Call toll free number is +1 866 
220 1452. The recording can be heard at the toll free dial in number +1 866 247 
4222, access code: 5880836#.                                                    
***                                                                             

It should be noted that certain statements herein which are not historical      
facts, including, without limitation, those regarding expectations for market   
growth and developments; expectations for growth and profitability; and         
statements preceded by "believes", "expects", "anticipates", "foresees", or     
similar expressions, are forward-looking statements. Since these statements are 
based on current plans, estimates and projections, they involve risks and       
uncertainties which may cause actual results to materially differ from those    
expressed in such forward-looking statements. Such factors include, but are not 
limited to: (1) operating factors such as continued success of manufacturing    
activities and the achievement of efficiencies therein, continued success of    
product development, acceptance of new products or services by the Group's      
targeted customers, success of the existing and future collaboration            
arrangements, changes in business strategy or development plans or targets,     
changes in the degree of protection created by the Group's patents and other    
intellectual property rights, the availability of capital on acceptable terms;  
(2) industry conditions, such as strength of product demand, intensity of       
competition, prevailing and future global market prices for the Group's products
and the pricing pressures thereto, financial condition of the customers and     
the competitors of the Group, the potential introduction of competing products  
and technologies by competitors; and (3) general economic conditions, such as   
rates of economic growth in the Group's principal geographic markets or         
fluctuations in exchange and interest rates. For more detailed information about
risk factors, see pages 15-17 of the company's annual report 2006.              

UPM-Kymmene Corporation                                                         
Pirkko Harrela                                                                  
Executive Vice President, Corporate Communications                              

DISTRIBUTION                                                                    
Helsinki Exchanges                                                              
New York Stock Exchange                                                         
Main media                                                                      
www.upm-kymmene.com

Attachments:

upmq1_07eng2404.pdf