PaperlinX has shown a marked improvement, reporting an after tax loss of $10.2m for the six months to December 31 2010, compared with a $175.3m loss the year before. However the paper giant is still operating in a difficult market with low volumes affecting takings.

Revenue was $2.44bn, down from $2.74bn the year before while volumes dropped 1.36 million tonnes down from 1.5 million tonnes from the previous year reflecting continued weak markets.

Commenting on the result Toby Marchant, CEO of PaperlinX says, “While it is clear market conditions remain weak, it is pleasing to see early evidence of operational and cost improvements across the business translating into improved earnings and an underlying profit.

“With volumes seeming to have flattened out, albeit at reduced levels, and ongoing pressure on pricing we will continue to focus on those matters which are within our control. Accordingly we will continue to make improvements in our working capital and cost base.”

PaperlinX also reduced its net debt to $200m, down from $251m at December 31 2009. The company says its debt has benefited from improved cash management outcomes from the working capital facilities established in the 2010 financial year and favourable foreign exchange translation.

Marchant concludes, “We will optimise our core product range and service delivery whilst accelerating investment into higher margin diversified areas.

“Given our lower cost base, a more efficient business structure and a focus on diversification we remain well leveraged for any cyclical recovery or upturn in economic conditions.”

No interim dividend was paid for the period.