Pipe manufacturer Uponor (Vantaa / Finland; www.uponor.com) said it intends to cut jobs and reduce production rates in response to an expected drop in full year operating profits. While full year net sales are expected to increase, operating profits “should fall somewhat short of the previous year's reported result,” the company said. It blamed the profits warning on weaker than expected demand from the construction sector.

Uponor reported a EUR 1.6m drop in operating profits for the first six months compared with the same period in 2010. The company said at the time that, based on construction industry forecasts, it was expecting improvements in the second half of the year to enable it to achieve higher full year operating profits. “However, more recent economic developments have reduced the validity of these construction industry forecasts,” it explained.

Management has initiated actions to reduce costs and improve cash flow, including exit from poorly performing markets, jobs cuts and implementation of voluntary programmes of unpaid leave, Uponor stated. In addition, production will be curtailed to run down inventories in line with expected demand and to support this year’s cash flow, it added.