In a statement to the ASX, PaperlinX outlined while it was continuing with its business restructuring programme to remove costs and better align businesses to the new market conditions, there was an unavoidable time lag between implementation and benefits flowing through to financial performance.

The statement continues, “With market conditions and other key factors remaining relatively uncertain and difficult to predict, PaperlinX expects to report a full year statutory loss after tax for the 2011 financial year in the range of $23m to $30m, (inclusive of an estimated non cash valuation loss for a foreign currency option of some $A14m after tax).”

While still in difficulty, the paper giant has seen an improvement with this year’s forecast compared to a statutory loss after tax of $225m in 2010.

Meanwhile, underlying earnings after tax for the 2011 financial year are expected to be a loss after tax in the range of $7m to $14m, after adjusting for the impact of the foreign currency option and discontinued operations. This compares to an underlying loss after tax of $28m in 2010.

Advising on overseas markets, PaperlinX claims trading and general economic conditions in its key European, United Kingdom and North American markets remain weak.

The ASX statement outlines, “Volumes are significantly below last year and below our expectations in Europe and the United Kingdom. Despite these market conditions the company is maintaining market share in Europe, the United Kingdom and North America and has implemented some price increases in these markets.”

PaperlinX also advises that the maturity date of the company’s largest borrowing facility (in Europe) has been extended from May 2012 to September 2013.

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