Cottonsoft makes loss in 2011, receives capital injections

Wednesday 10th October 2012

Cottonsoft, the maker of Tuffy paper towels and Kiwisoft toilet tissue, has received capital injections from its foreign owner after breaching its bank covenants in 2011.

The company didn't pay a dividend to Asia Pulp and Paper in the 2011 calendar year in a period which it reported an operating loss of $2.63 million.

That was wider than the loss of $1.51 million the previous year, mostly because of an increase in operating and distribution costs.

Revenue rose to $80.57 million from $72.83 million the previous year, accounts filed to the Companies Office show.

The bottom-line loss of $2.4 million was wider than the loss of $2.04 million the previous year.

Cottonsoft makes toilet tissue, paper towels and serviettes from imported paper.

Its accounts show that it breached its bank covenants in 2011 and that an $800,000 term loan was due to mature on July 1, 2012.

A company spokesman said the loan had been paid up and the company had received capital injections from its parent. It received $US1.6 million on July 25, US$500,000 on Aug. 27 and $US900,000 on Sept. 18.

The company has been the target of a campaign by Greenpeace over the environmental sustainability of its paper and by competitor Carter Holt Harvey which failed to have it on for claiming its products were New Zealand-made when the raw materials were imported.

The company has $3.35 million of tax losses available to offset against future income tax.

Cottonsoft makes Tuffy Paper Towel and Paseo, CottonSofts and KiwiSoft Toilet Tissue.

BusinessDesk.co.nz

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