The company posted a $175.3m loss for the six months ending 31 December, which included a one-off $103m significant item charge associated with its closure of its Tasmanian manufacturing operations.

The paper company announced in December that it would be quitting manufacturing to focus solely on its global merchanting operations, and would close its entire Wesley Vale site and a portion of its Burnie site.

The company said today that “a sale of the Burnie Mill remains a potential alternative to closure”, with a decision expected to be made by June this year.

PaperlinX chief executive Tom Park said: “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.

“The total costs of closure are now expected to be lower than December 2009 estimates, depending upon the final outcomes for the Burnie Mill, as requirements have been reviewed in more detail.”

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

The overall loss marks the second year in a row that the company has ended up in the red, following on from a loss of $560.9m for the corresponding period in 2008, which included a $567.5m significant item charge. Significant items for the second half of 2009 totalled $148.8m.

Group revenue for the period dropped 28% to $2.74bn, while the manufacturing exit also impaired the company’s volume output, which dropped 24% to 1.5 million tonnes.

The company also blamed “weak demand” for lower overall volumes, saying that the economic recovery in the European market was “lagging” behind other regions.

“The UK, our single largest market, remains weak, with difficult weather conditions in January impacting earnings as we start the second half,” said Park.

The company has also continued to trim its workforce in light of its manufacturing cuts and the sale of Australian Paper last year, shedding 4% of its workforce in the second half of 2009 to comprise 6,931 employees by the end of December. 23% of the company’s total workforce was shed in 2009.

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