PaperlinX turns page on cutting losses

Paperlinx said yesterday it expected a net loss of $23 million to $30 million in 2010-11, an improvement on the $225 million loss the previous year. Underlying earnings after tax were expected to show a loss of $7 million to $14 million, after adjusting for foreign currency and discontinued operations.

This compares with an underlying loss after tax of $28 million in 2009-10. Possible implications for impairment valuations at June 30 would be considered, PaperlinX said.

"Trading and general economic conditions in our key European, United Kingdom and North American markets remain weak," it said.

"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 UK and North America and has implemented some price increases in these markets."

PaperlinX said the depressed Australian print market was being further affected by the high Australian dollar. Coupled with the company's strategy of not pursuing riskier, lower-margin business, this was affecting results in Australia.

While the company was continuing with its restructuring program, it reported "an unavoidable time lag between implementation and benefits flowing through to financial performance".