Powerflute Sees FY Results In Line With Market Views

28th Jul 2010 07:39

LONDON (Dow Jones)--Powerflute Oyj (POW1V.HE), a packaging group with established positions in Nordic semi-chemical fluting and coated woodfree papers, said Wednesday results for the first half will be below those of the prior year but expects performance for the full year to represent an improvement on the prior year and to be close to current market expectations. MAIN FACTS: -Mixed trading conditions, outlined at the Annual General Meeting held in April, continued into the second quarter. -However, demand 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 Co. expects this strong performance to continue into the second half and beyond. -In contrast, 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 EUR6 million while the impact of higher pulp costs was in excess of EUR9 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 stabilized 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. -Shares closed Tuesday at 22 pence. -By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [email protected] (END) Dow Jones Newswires July 28, 2010 02:39 ET (06:39 GMT)