Paper merchant PaperlinX has reported a $57.3m statutory loss after tax for the half year ending December 2012, as local paper volumes tumbled by 13 per cent.
The company reported a loss per share of 9.4 cents compared to a loss per share of 10 cents in the previous corresponding period (pcp).
The $57.3m loss is a 5.9 per cent year on year improvement, as continuing revenue was $1.44bn, down from $1.73bn for pcp which the company says is due to weak market conditions the and to a market share loss.
Global revenue fell 17 per cent while the turnover in Australia, New Zealand and Asia region fell by 13.2 per cent to $218.4m, however earnings before interest and tax for the three territories rose 36.8 per cent reaching $7.8m.
PaperlinX reported an underlying loss for the period of $24.3m compared to $18.7m pcp with restructuring costs of $6.4m after tax.
Dave Allen, CEO, PaperlinX says, “Although the loss is significant given the impairment charge, actions taken during the half have laid the foundations for PaperlinX to return to profitability in 2014.”
Allen says, “Australia, New Zealand and Canada continue to be our strongest performers and we will take the earnings from these regions operating a single brand to market to Europe and UK. Combined with the significant restructuring well underway in Europe and the UK and the investment growth in Packaging and Sign and Display across all regions, this positions PaperlinX for a turnaround in financial performance.”
The total cash inflow on a net debt basis of $14m was favourable compared to the $60m outflow for the pcp largely due to $79m proceeds from the disposal of Paperlinx businesses in Italy, US, Eastern Europe and South Africa. Operating outflow was $61m, which was $12m adverse to the $49m outflow for the pcp due to a deterioration in trading results and unfavourable working capital movements.
Packaging made six per cent of PaperlinX sales, and the company plans to further invest in its growing Packaging and Sign and Display divisions.
Meanwhile executive director Andrew Price has been given a remuneration package which will see him earn $240,000 per annum and give him 35 million share options at strike prices of between 10 cents to 50 cents per share at exercise dates over five years from the shareholders approval.
Mike Barker, chairman, PaperlinX says, “The structure of Andrew’s remuneration package is appropriate as it is designed to reward him for services performed to date, as well as to reflect his contribution in respect of work to be performed in relation to the current restructuring programmes. In addition, the remuneration package is aligned with shareholders interest.”
Price is currently based in Holland and is working with PaperlinX management to add weight to the restructuring efforts in the region.
