Net profit after tax for the year excluding the Australian Tax Consolidation (ATC) benefit was $91.5m, down 16 per cent on the prior year. Net profit after tax including a $77 million once only benefit arising from the company’s election to enter the ATC regime was $168.5m.

Profit before interest and tax of $185m was down three per cent on the prior year due to the substantially lower earnings contributed by the Australian Paper manufacturing business, offset partially by the increased earnings from the paper merchanting business.

The report acknowledged that the global paper industry has faced a tough year with subdued demand, high levels of available fine paper, lower selling prices and higher oil prices. However, the PaperlinX merchanting business continues to deliver returns in the top quartile for merchanting businesses worldwide, despite difficult market conditions, again highlighting the relatively lower volatility of paper merchanting earnings compared to paper manufacturing.

Sales volumes in the sheet fed sector and the web sector increased, however selling prices reduced due to currency and competition from low priced imports. In New Zealand selling prices have reduced over the last six months due to competitor activity to increase market share. PaperlinX is maintaining volume at reduced margins. One of the major profit improvement programmes completed during the year was the centralisation of the Melbourne, Australia, operations to one facility.

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