Hard times take toll on PaperlinX

Exit from paper manufacturing and falling volumes lead to $225.3 million loss for PaperlinX.

In its 2010 full-year results, the company felt the effects of exiting from manufacturing, restructuring costs and decreased volumes across key markets.

Group revenue of $5.2 billion was down 26.5 per cent on the prior year, with volume of 2.9 million tonnes down 20 per cent, reflecting the exit from manufacturing and weak markets globally. Unallocated costs and operating losses associated with the new closed Tasmanian operations also resulted in an EBIT loss for the group of $23.5 million.

According to chief executive officer, Tom Park, (pictured), it has been a testing time for the company, but the costs were necessary in order to move forwards.

“The past year has been the most difficult but also the most transformational in the history of PaperlinX,” he said. “Whilst the results are disappointing, we have completed a range of major strategic initiatives, which have resulted in the company being more focussed, streamlined and flexible.”

Looking ahead, Park believes that volumes have stabilised and the company has started the year at expected volume and profitability levels to date. “We are taking prudent steps to further streamline our organisation and further reduce overheads and working capital,” he said.

“Now, with the distractions of the refinancing, exit from historical lenders, and the closure of Tasmanian operations and various restructurings behind us, we are able to focus fully on our underlying business.”