Business

Powerflute, the Finnish containerboard manufacturer chaired by Dermot Smurfit, continues to evaluate "a number of acquisition possibilities" after reporting its first full-year results as a public company.

The firm's share price fell by 1.25p to 69.5p this morning (17 March), despite reporting a pre-tax profit of €12.5m (£9.6m), up 117%, on sales of €115.7m, a rise of 18%, in the 12 months to 31 December 2007.

Smurfit said sales of Powerflute's semi-chemical fluting had remained strong throughout 2007, allowing the firm to implement price increases to recover input costs.

Sales volumes increased by 5% to 262,792 tonnes from 251,375 tonnes in 2006.

Smurfit added that demand had been underpinned by "steady growth" in global trade, in particular for fruit and vegetables packed in corrugated boxes for new markets around the Mediterranean and South America.

Production volumes rose by 2.8% to 260,634 tonnes, although the firm said this would have been higher but for wood shortages following the warm winter in the Nordic and Baltic regions and disruptions caused by the introduction of a Russian export tax.

Powerflute has entered into a joint venture with Myllykoski to manage its wood procurement and secure supply. The current supply agreement with Metsaliitto is due to end on 31 December 2009.

Smurfit said the new joint venture, which he expected to be operational this summer, would ensure continuity of supply to the firm's Savon Sellu mill in Finland. The mill would also benefit from "lower costs and higher efficiencies" owing to complementary grades of wood and similar locations.

Further operational efficiencies will be achieved by the installation of a new paper machine headbox at Savon Sellu during the annual maintenance shutdown in May.

Smurfit said the outlook for 2008 was "positive" and the board viewed the year "with confidence".

Powerflute's semi-chemical fluting product is made primarily from birch wood sourced from Finland and Russia and used mainly to make boxes for fresh and frozen produce.

Other applications include electrical goods and agricultural and automotive products.