LONDON (Alliance News) - AIM-listed paper and packaging company Powerflute Oyj on Wednesday said its pretax profit fell in 2014 due to higher financing costs and expenses related to the acquisition of Corenso, though the group's revenue increased and it raised its dividend payout.
Powerflute said its pretax profit fell to EUR8.6 million from EUR10 million a year earlier, primarily due to one-off costs related to the EUR102.3 million acquisition of Corenso, which it completed in December. The profit was also hit by higher raw materials costs.
Powerflute bought cores and coreboard producer Corenso from Finnish pulp and paper manufacturer Stora Enso Oyj in an EUR81 million deal that was categorized as a reverse takeover of Powerflute.
Revenue increased to EUR150.1 million, up from EUR129.4 million, with revenue from Powerflute's Packaging Papers unit rising 4% to EUR134.4 million form EUR129.4 million as broadly favourable market conditions mitigated the impact from weaker trading in Europe.
The company added it will hike its dividend for the year to 1.5 euro cents per share, up from 1.35 cents last year.
"I am pleased to report that 2014 was another successful year for Powerflute, with improvement in the underlying profit and earnings per share from our Packaging Papers businesses. We were delighted to complete of the acquisition of the Corenso group of companies in December 2014, and remain excited about the future potential of the business and expect it will make a significant contribution to earnings per share in 2015 and beyond," said Chairman Dermot Smurfit.
Smurfit added the Packaging Papers unit has made an "encouraging" start to 2015, with a good operating performance augmented by favourable market conditions and exchange rates. The Coreboard and Cores segment is also performing well, he added.
Shares in Powerflute were up 3.4% Wednesday to 53.00 pence.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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