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Finnish forestry giant UPM reported a smaller-than-expected fall in quarterly profits, saying lockdowns hit paper demand and prices.

UPM’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the April-June quarter fell to 320 million euros ($371 million) from 466 million a year earlier.

“The lockdown of businesses, offices and schools caused a drastic decline in printed advertising and use of office papers,” Chief Executive Jussi Pesonen said in a statement.

“Demand for graphic papers seriously suffered as a result of lockdowns, whereas labels and speciality papers saw strong demand and delivered excellent results,” Pesonen said.

UPM said the pandemic, the related lockdowns and the economic downturn have caused a high level of uncertainty for the second half of 2020, and forecast full-year comparable operating profit to fall significantly from 1.4 billion euros in 2019.

This summer UPM closed the Saynatsalo plywood plant in Jyvaskyla, central Finland and the Chapelle paper plant in France. The plywood plant in Jyvaskyla had been in production since 1914.

The company forecast a moderate rise in paper prices during the second half of the year from the first half.

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