PaperlinX suffers $560 million loss

Another blow to PaperlinX after a first half net loss of $560 million.

The news comes after PaperlinX announced that it would sell Australian Paper to Nippon Paper for $700 million. Chief executive officer, Tom Park, believes that the sale will be vital in repairing the company.

“The sale of Australian Paper is a major strategic milestone in our transformation from an Australian paper manufacturer to a focussed global paper merchanting and distribution company,” he said.

“The sale proceeds will be used to reduce debt. We are confident this is a prudent step in light of the state of global debt markets and the desire to strengthen the company’s financial position.”

PaperlinX reported revenue of $3,783.9 million, flat on the prior corresponding period, and declared no interim dividend, down from 3 cents in the prior first half.

Volumes were down by 7 per cent, reflecting weaker demand while underlying results in local currencies showed the impact of weaker market volumes. Both the UK and US were “well down” on previous figures.

Park forewarned that the future of the company was still uncertain.

“It will not be an easy business environment in the year ahead for either PaperlinX or the world in general,” he said.