"Pulp demand has continued to be good and pulp prices have increased rapidly," UPM's Chief Executive Jussi Pesonen said in a statement.

Underlying operating profit for January-March totalled 279 million euros ($336.7 million), unchanged year-on-year and in line with a mid-April pre-release.

UPM's biorefining unit - its biggest profit creator and largest sales creator after its paper unit - reported a jump in underlying operating profit to 90 million euros from 37 million a year earlier as sales grew 19% to 606 million euros.

"Demand for pulp, timber and biofuels was good and pulp prices increased faster than expected," Pesonen said.

The results echoed a similar development at UPM's domestic peer Stora Enso, which last week reported a bigger-than-expected jump in first quarter operating profit but said its paper unit fell to a loss as its sales dropped 28% from last year.

UPM's paper unit saw first-quarter revenues tumble 16% to 815 million euros as demand and prices dropped from a year earlier, and the unit's operating profit fell to 20 million euros from 76 million a year before.

Shares in UPM were down 0.9%, in line with a weaker Helsinki bourse.

($1 = 0.8286 euros)

(Reporting by Tarmo Virki and Essi Lehto; Editing by Susan Fenton)