This result includes the profit on sale of Netherlands properties booked in June; various restructuring activities that occurred through the year to further reduce the cost base going into the new financial year, and is before consideration of any impairment reviews.
Other indications include:
- The results for Paper Manufacturing (comprising 11 months for the business sold, with completion accounts yet to be finalised, and 12 months for the Tasmanian operations) were negatively impacted in recent months by the stronger A$ and softer pricing across many export grades.
- Merchanting expenses show a significant favourable variance versus the prior year and prior expectations through successfully targeted cost reduction programmes across all regions, but are insufficient to mitigate the worse than expected market driven volume weakness seen in the last six weeks of the year in Europe and North America.
- In this environment, PaperlinX says it made strong progress on working capital reductions and cash management in the second half, and now expects that net debt at 30 June 2009 will be around $220 – $250m; 30 per cent lower than previous guidance of $327m.
As previously announced, reported EBIT before significant items for 2009 will be further reduced by around $95m in costs relating to ongoing corporate overheads, previously announced FX losses and bank/note holder charges, consultants’ costs for lenders and related waiver fees and will also include a loss on sale adjustment of approximately $(150)m.
PaperlinX also recorded an impairment in the carrying value of the fixed assets of Australian Paper of $(567.5)m in its interim results.
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