Powerflute poised for much better year

4th May 2011 16:02

Nordic packaging and paper group Powerflute is free of debt after the disposal this week of its Scheufelen graphic papers business for €38.5m.After banking the proceeds from its €18.3m rights issue back in November 2010 the company saw net debt reduce to €29.1m at the end of 2010 from €52.1m a year earlier. In 2011, revenues rose by 22% to €310.6m, with an increase in underlying operating profit to €0.9m, versus the previous year's €0.1m.Volumes improved in both of the group's business areas and prices increased in Packaging Papers, though the benefits were offset by significant raw material cost inflation in the Graphic Papers division. Packaging Papers performed well as strong demand and a favourable pricing environment resulted in greatly improved margins and cash generation.Net cash inflow from operating activities increased to €16.3m, from 2009's figure of €10.5m. Following the disposal of its graphic papers business, the company feels able to recommend the payment of a final dividend of 1 cent."We expect market conditions to remain broadly favourable for Packaging Papers for the remainder of the year, supporting good volumes and attractive pricing levels. We have made a strong start to the year and currently expect that 2011 will be a much better year for the group," Powerflue chairman Dermot Smurfit said.ab