The Australian paper giant is still in the red, but its after-tax loss of $10.2m for the six months to 31 December 2010 is a vast improvement over the $175m loss for the same period a year previous.

Paperlinx also paid down its debt by more than $50m, from $251m at 31 December 2009 to $200m in this half year.

Revenues dropped 11% from $2.44bn to $2.74bn, which the company blamed on reduced volumes due to soft demand in some European countries, North American and Australasian markets.

“While markets remained generally soft in the UK and Benelux there were improvements in Central Europe and Germany,” said Paperlinx in a statement to the ASX. “Market conditions remained weak in ANZA.”

Chief executive Toby Marchant said: “We will continue to improve and streamline our operations to generate acceptable returns to our investors and make our business more relevant to the markets we serve.”

He pointed to Paperlinx’s “lower cost base”, “more efficient business structure” and “focus on diversification” as the route map for future improvement.

The report also confirmed the recent announcement that staff changes at Paperlinx’s corporate head office in Melbourne and the closure of its European head office in Amsterdam would reduce overheads by $15m for the next financial year.

Paperlinx posted a loss after tax of $225.3m for the last full financial year, describing it as “the most difficult year in its history”.

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