Opal Australian Paper, which made the decision to close several of its paper machines following the unplanned end of VicForests wood supply last year, has caused its parent company Nippon Paper a total of 6.1 billion yen ($63.9 million) in losses.

According to Nippon Paper, the extraordinary losses related to the withdrawal from Opal include:

• Approximately 4.9 billion yen ($52 million) related to the withdrawal from the business, including redundancy payments for personnel rationalisation, in the first quarter of FY2024/3
• And in FY2024/3, an impairment loss of approximately 1.2 billion yen ($11.9 million) on fixed assets due to a recent decision to shut the M2 paper machine at the Maryvale Mill from around late August in relation to unexpected suspension of supply from VicForests.

“As disclosed in the Notice of Withdrawal from the Business, on February 14, Opal, a consolidated subsidiary of the company, decided to withdraw from the graphic paper business (resulting in permanent suspension of some manufacturing facilities at the Maryvale Mill) due to sudden and unexpected suspension of supply from VicForests,” Nippon Paper mentioned in an update.

“[This has resulted in] extraordinary losses related to the withdrawal from the business.”

Nippon Paper added that the rest of the estimated losses related to business withdrawal, including personnel rationalisation, is still under scrutiny.

However, it mentioned that its earnings outlook will remain unaffected.

“The impact of the above extraordinary loss on the consolidated earnings forecast for FY2024/3 has already been factored in and the earnings forecast will remain unchanged,” it mentioned.

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