Trouble in Tasmania takes toll on PaperlinX

Last year’s exit from Tasmanian manufacturing operations contributes to drop in earnings for merchant and manufacturer, PaperlinX.

In its 2010 interim results for the six months ended 31 December 2009, the company reported a loss after tax of $175.3 million. Group revenue for the period of $2.74 billion was down 28 per cent on the prior corresponding period, while volume of 1.5 million tonnes was down 24 per cent. In a statement, PaperlinX claimed that this was due to “the result of the exit from paper manufacturing operations in Australia” and “the impact of weak markets.”

According to chief executive officer, Tom Park, (pictured) the one-off cost related to the Tasmanian operations was expected. “Our exit from the Tasmanian paper manufacturing operations is progressing to plan, with this result including a number of one-off significant items related to this activity,” he said. “It has not been an easy period, but our employees have continued to show a professional and pragmatic approach.”

The fate of PaperlinX’s Tasmanian operation is expected to be decided later this year. A sale of the Burnie Mill remains a potential alternative to closure. Following the Tasmanian exit, PaperlinX will become a global merchant.

“Going forward, our business will be a focussed merchanting business with around 60 per cent of our revenue generated in Europe and the balance split between North America and Australia, New Zealand and Asia,” said Park.