UPM Takes Miramachi-Related Impairment Charge

Helsinki, Finland, 09 October 2006 – UPM will book an impairment charge of approximately EUR 115 million, and net of taxes approximately EUR 80 million, relating to the production facilities at Miramichi magazine paper mill in Canada.

The remaining carrying value of property, plant, equipment, and intangible assets is approximately EUR 20 million. The cash flow of Miramichi mill has remained weak especially due to the strengthened Canadian dollar in relation to the U.S. dollar.

Relating to the ongoing extensive profit improvement program, UPM books a provision for personnel expenses of approximately EUR 12 million and an impairment charge of EUR 5 million in the third quarter of 2006. In March 2006, UPM announced that the program related provision for personnel expenses for the year 2006 is approximately EUR 65 million, of which EUR 37 million was booked in the second quarter of 2006. The program is proceeding according to the plan.

The results of the third quarter of 2006 include a tax-free capital gain of approximately EUR 90 million from the sale of Puukeskus, as announced in June.