Current price of just over $4.10 is 25 per cent less than the $5.11 it stood at two years ago. PaperlinX blames falling selling prices for paper for the depressed earnings, but said the second half of the year should be stronger than the first.

However with volumes and prices falling in Europe analysts are not convinced. Stora Enso has already postponed planned price rises of its fine paper prices. Sappi meanwhile is pushing ahead with price rises, but will be alone in that. PaperlinX, which is one of Sappi’s biggest customers will have to either try and pass the rises to its customers, absorb the rise itself, or give up some market share, none of which is an attractive option.

The PaperlinX manufacturing arm, Australian Paper, is currently only achieving a 2.9 per cent return, well below analysts target of 12 per cent.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.  

Sign up to the Sprinter newsletter