UPM-Kymmene - Company Announcement

UPM's results continued to improve, Efficiency of operations increased

Interim report January-June 2007: Earnings per share excluding special items for
the second quarter were EUR 0.28 (EUR 0.04 for the second quarter of 2006).     
EBITDA for the second quarter was EUR 411 million, 16.2 % of sales (EUR 398     
million, 16.0 %). Operating profit excluding special items was EUR 225 million  
(EUR 79 million).                                                               

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

"UPM's results have improved year on year. Our profitability programme          
contributed to the more efficient use of assets and the stringent cost control  
yielded savings in costs. Thus the overall cost increase during the first half  
of the year was only approximately 1% compared with last year."                 

"Newsprint, Fine and Speciality Papers and Wood Products Divisions have improved
results from last year whereas the result of the Magazine Papers Division was   
unsatisfactory. To change this we have - in addition to our closures of last    
year - decided on a temporary shutdown of the Miramichi mill in Canada. Provided
all the other announced closures will be implemented by the industry, we expect 
the coated magazine paper markets to be tighter towards the end of the year."   

"Demand for paper continued to grow in Europe and Asia. Our paper deliveries    
increased compared to last year but the average price of all paper deliveries   
was slightly lower. The weak US dollar impacted on the profitability of our     
paper exports."                                                                 

"In the third quarter, in Europe, demand for printing papers is forecast to grow
slightly 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. We estimate that our paper deliveries will increase    
slightly from last year and that the average price for all paper deliveries will
be about the same as in the second quarter of 2007."                            

"Demand for self-adhesive label materials is forecast to continue to be good,   
and prices are expected to remain stable. In wood products, strong demand for   
plywood and sawn timber will continue during the third quarter. Shortage of     
birch logs may cause reduction in birch plywood production during the latter    
part of the year."                                                              

"We estimate the overall cost inflation for 2007 to be approximately 2%         
including the expected cost savings from the ongoing profitability programme."  

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-June 2007 will be held today,   
July 26, 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 
Q2 2007 Financial Results, access code: 6387296. A recording of the discussion  
can be heard until August 2, 2007 by calling +44 (0)1452 550 000, access code   
6387296#.                                                                       

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 at the number +1 866 
247 4222, access code: 6387296#.                                                
***                                                                             

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 including the            
availability and cost of production inputs, 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                              

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Helsinki Exchanges                                                              
New York Stock Exchange                                                         
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