28th July 2010
POWERFLUTE OYJ
TRADING STATEMENT
Powerflute Oyj (the "Company" or “Powerflute”), the packaging group with
established positions in Nordic semi-chemical fluting and coated woodfree
papers, today provides the following update ahead of the announcement of its
interim results for the six months ended 30 June 2010.
The mixed trading conditions, outlined at the Annual General Meeting held in
April, continued into the second quarter. However, demand for our products
remained robust and both businesses were able to operate at close to maximum
capacity throughout the period.
Selling prices for Nordic semi-chemical fluting recovered strongly and
profitability in this business had greatly improved by the end of the period.
Following a challenging first quarter, which was adversely impacted by the
Finnish port strike, the business performed well throughout the second quarter
and we expect this strong performance to continue into the second half and
beyond.
In contrast, our coated woodfree business experienced both lower average selling
prices and higher raw material costs, compared with the same period in the prior
year. The adverse impact of the reduction in average selling prices was €6
million while the impact of higher pulp costs was in excess of €9 million. A 28%
increase in delivered volumes, the successful implementation of cost reduction
and performance improvement measures and price increases achieved during the
period, only partially offset these factors.
Price recovery in Nordic semi-chemical fluting and coated woodfree markets is
expected to continue during the second half of the year and demand currently
remains strong in both businesses. Pulp costs in Europe appear to have
stabilised over the summer months and there is evidence that they have begun to
reduce in some markets. Together, these factors should lead to improved
performance during the second half of the year.
Accordingly, while the results for the first half will be below those of the
prior year, subject to the positive trends outlined above continuing, we expect
performance for the full year to represent an improvement on the prior year and
to be close to current market expectations.
The Group's results for the six months ended 30 June 2010 will be announced
during August 2010.
- Ends-
Contacts
For additional information please contact:
--------------------------------------------------------------------------------
| Powerflute OYJ | | c/o Billy Clegg, Financial |
| Dermot Smurfit (Chairman) | | Dynamics |
| Marco Casiraghi (Chief | | +44 (0)20 7269 7157 |
| Executive) | | |
| David Walton (Chief Financial | | |
| Officer) | | |
--------------------------------------------------------------------------------
| Collins Stewart Europe Ltd: | | +44 (0)20 7523 8350 |
| Piers Coombs | | |
| Mark Dickenson | | |
--------------------------------------------------------------------------------
| E.Öhman J:or Fondkommission AB: | | +358 9 8866 6029 |
| Ms Arja Väyrynen | | |
--------------------------------------------------------------------------------
| Financial Dynamics: | | +44 (0)20 7831 3113 |
| Billy Clegg | | |
--------------------------------------------------------------------------------
| K Capital Source | | +353 (1) 663 3686 |
| Mark Kenny | | |
| Jonathan Neilan | | |
--------------------------------------------------------------------------------
About Powerflute
Powerflute Oyj (“the Company” or “Powerflute”) is a packaging group with
established positions in Nordic semi-chemical fluting and coated woodfree
papers. Powerflute is listed on the AIM market of the London Stock Exchange
(Ticker: POWR) and on the First North list, the alternative market of the OMX
Nordic Exchange Stockholm AB (Ticker POW1V).
Through its subsidiary Savon Sellu Oy, the Group operates a paper mill in
Kuopio, Finland which produces a specialised form of semi-chemical fluting made
from birchwood sourced principally in Finland and Russia. Corrugated boxes
manufactured using Nordic semi-chemical fluting demonstrate exceptional strength
and moisture resistance and are extensively used for transportation of fruit and
vegetables, high-value industrial goods such as electrical appliances and
automotive components. The Kuopio mill has the capacity to produce up to 300,000
tonnes per annum and is one of three suppliers of Nordic semi-chemical fluting
in Europe.
Through its recently acquired subsidiary Papierfabrik Scheufelen, the Group
operates a paper mill in Lenningen, Germany which produces a range of coated
woodfree papers from mixed hardwood and softwood pulps. Coated woodfree papers
are used in the production of printed promotional material such as brochures,
leaflets and other point of sale materials for producers and distributors of
premium branded goods. The Lenningen mill has the capacity to produce up to
300,000 tonnes per annum and supplies the majority of its products into the
European market where total demand has historically been in excess of 7.7
million tonnes per annum.
Trading Statement
| Source: Powerflute Oyj