Finnish papermaker UPM has posted better-than-expected results for Q4 after cost-saving measures, but warned of falling paper prices and a challenging 2010.

"In our main markets, recovery is expected to be slow and differ from country to country," UPM said in a statement. "Low capacity utilisation rates and a flexible way of working in our timber, plywood and European paper mills will continue."

The company posted a €2.1bn turnover for the fourth quarter of 2009, compared with €2.3bn for the same period a year earlier. Pre-tax profit for the last quarter was €311m up from a loss of €360m the same time a year earlier.