Cham Paper Group presents half year results; revenues increased by 3%
(Switzerland, August 19, 2016) The Cham Paper Group enjoyed a largely satisfying first half of 2016. The Group increased revenues by 3% to CHF 103.8 million and posted an operating profit of CHF 5.2 million. This meant that the lower end of the target margin range was exceeded for the first time in a long time following a challenging transformation process in the paper division. Net income amounted to CHF 3.3 million.
In a slightly weaker market environment, the paper division benefited from the efficiency improvements made so far in production and from a return to normal raw material prices. In the real estate division, the public vote on the rezoning and the development plan for the Papieri-Areal will be held on 25 September.
Although market conditions for the Cham Paper Group’s speciality papers were predominantly positive at the start of the year, they deteriorated somewhat as the year progressed. A decline in the consumer goods segment was offset by an increase in deliveries in the industrial release and digital imaging segments.
The relocation of production activities and the extensive modernisation of the factories in Italy have now been completed successfully. The production managers have launched new projects to generate additional synergy effects to be leveraged in particular through process optimisation. For example, the Cham Paper Group is to restart the in-house manufacturing of some basic papers used in digital imaging.
The paper division posted a net revenue of CHF 103.4 million and maintained volumes at an unchanged level. The 3.0% increase in turnover was due to slightly higher prices, a better turnover mix and currency effects. Normalising raw material prices and the efficiency gains achieved at the factories pushed gross profit up to CHF 14.1 million (previous year: CHF 11.3 million). In addition, fixed costs were further reduced and an operating profit (EBIT) of CHF 5.2 million was achieved (previous year: CHF 1.4 million). This equates to an EBIT-margin of 5.0%, within the target margin range of 5-12%.
Sales in the consumer goods division fell year on year in volume terms. Demand for food/non-food papers and for wet glue labels was particularly badly hit by the Euro’s rise against the US dollar and the economic slowdown in China. The innerliner business (tobacco) saw a temporary increase in sales in the first few months.
Turnover from products for industrial applications (industrial release segment) was significantly higher compared with the same period in the previous year. In Europe particularly, the Cham Paper Group benefited from good market demand and its well-known name. For instance, sales in the facestock product group witnessed double-digit growth thanks to the leading market position enjoyed by speciality papers for metallised labels. The industrial productions and labels product group also reported an above-average increase in turnover. Sales of tapes, however, declined slightly.
Following the challenging transfer of digital imaging products to Italy, this sector, which is the Group’s most promising, was able to focus entirely on market activities once more. Accordingly, volumes sold increased by 20% following last year’s period of stagnation. In particular, sublimation papers for the textile market are enjoying steady growth in demand. However, market growth also entails mounting price pressure, a situation to be offset by instigating various measures to increase production efficiency. (Source: press release)
