|Sales revenue (A$ million)||1,049||1,033|
|Earnings before interest and tax (A$ million)||25.5||13.8|
|Sales volume (’000 tonnes)||741||725|
Our primary focus is on the commercial print, packaging, web and office segments – from paper selection to final delivery.
Australia, New Zealand and Asia
PaperlinX Merchanting Australia, New Zealand and Asia are the leading merchanting groups in Australia and New Zealand and operate in a number of Asian countries.
This division faced challenging market conditions throughout 2007 with no growth in Australia and a significant decline in the overall market in New Zealand, but with growth in the underlying markets in Asia. In this environment, overall volumes declined 2 per cent, including volumes lost as pricing was held in specific cases. Paper Trading volumes were lower due to reduced volumes available for export sale from paper manufacturing as a result of production line closures.
Customer consolidation has been a key feature of both the Australian and New Zealand markets, which, combined with continued over capacity in the print industry, has made these markets increasingly challenging.
Overall price realisations were down 1 per cent with significant regional and product mix variations. Pricing in Australia and New Zealand remained under pressure from a weak US dollar.
Reported operating earnings of $13.8 million were impacted by a number of one-off items, totalling $(9.4) million versus last year, explaining much of the year on year variance. This included a $(7.7) million negative impact on the New Zealand EBIT resulting from the continued strong appreciation of the New Zealand dollar against the US dollar (up 27 per cent), and a net $(1.7) million impact on Australian EBIT related to restructuring activities. Paper Trading produced a strong result.
Against this environment PaperlinX Merchanting Australia, New Zealand and Asia has made good progress in reducing costs and managing working capital. Working capital reduced by 9 per cent following good performances on a number of warehouse consolidations in Australia.