Arctic Paper S.A., one of Europe’s producers of graphic paper, earned revenues of PLN 1.06 billion in the first six months of 2010 and returned a net profit of PLN 755,000.
The first half of the year brought major changes to the paper industry. Most of the external factors that had a favourable impact on results in the previous year had a negative influence, which was reflected in the company’s results. Arctic Paper has taken a number of measures which over the next few months should minimize the effect of these unfavourable factors on the business of the Group. These steps include introducing further price increases for its products and continuing the profit optimisation process.
In terms of operations, all plants ran at over 90% of their production capacity during the period, thanks to a satisfactory level of demand. At the same time, the diversification of pulp supply sources enabled the company to avoid stoppages because of a lack of supply, which occurred at several other European paper mills.
The process of integrating the Grycksbo paper mill into the Arctic Paper group structure is currently well underway. Work is also in progress on modifying the logistics system in Scandinavia and rest of Europe to exploit synergies between the plants at Munkedal and Grycksbo.
"The first half of 2010, was a more challenging period for Arctic Paper, as we predicted at the end of last year. The financial results for the period were under great pressure from unfavourable market factors, such as the rise in the price of pulp, our main raw material, and adverse movements in exchange rates," said Michał Jarczyński, CEO of Arctic Paper S.A. "We have now taken a series of measures in order to improve our performance including further price increases for our products, improving product and customer mix and implementing plans to improve profitability at all of our plants. We are currently running at 90% of our production capacity and, with demand continuing at satisfactory levels, we can expect the plants to run at full capacity. A reduction in the costs of raw materials is also anticipated and this should make a significant contribution to improved results by the end of the current year."
