No local pick up for PaperlinX

Weak market conditions continue in Australia, New Zealand and Asia as PaperlinX reports reduced loss of $10.2 million in its 2011 interim results.

The company managed to reduce its first-half loss of $10.2 million for the six months to 31 December 2010 compared to a loss of $175.3 million for the prior corresponding period.

For the half-year, ANZ and Asia suffered a drop in both earnings ($9.4 million, down from $10.8 million the previous year) and sales revenue ($279.9 million, down from $305.9 million).

Of all the regions, Central Europe and Germany saw volume improvements, resulting in an earnings increase of $12.8 million – up from $8.5 million the previous year for Europe.

CEO, Toby Marchant, believes that while conditions are tough, there is “early evidence” of operational and cost improvements.

“With volumes seeming to have flattened out, albeit at reduced levels, and ongoing pressure on pricing we will continue to focus on those matters which are within our control,” he said.

“Given our lower cost base, a more efficient business structure and a focus on diversification, we remain well leveraged for any cyclical recovery or upturn in economic conditions.”

Staff changes at the corporate head office in Melbourne (including former CEO Tom Park’s exit from the hot seat which is now filled in the UK) and the closure of the European head office in Amsterdam is expected to reduce corporate overheads by $15 million per annum from the 2012 financial year and be cost-neutral in the current financial year.

Last week, in an interview, Marchant revealed that in five years’ time PaperlinX is likely to be a different company and will focus on its logistics area.