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CORRECTION: Huhtamaki NZ earnings fall 10% without loss-making plant

Thursday 1st September 2011

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Finnish packaging company Huhtamaki Oyj local earnings fell 10% in the 2010, even without the loss-making New Lynn plan which it plans to shut down.

Huhtamaki (NZ) Holdings, the multi-national’s local holding company for the Henderson business, made a net profit of $2.5 million in the 12 months ended Dec. 31, down from $2.8 million a year earlier, according to documents lodged with the Companies Office. Revenue fell 1.5% to $63.8 million.

That fall doesn’t include business from the unprofitable New Lynn flexible packaging plant, which the company yesterday said it will shut down by July next year, shedding some 135 staff at the factory. Huhtamaki said the plant was making a loss, and closing it will lift the segment’s earnings before interest and tax by an annual 5 million euros.

The New Lynn business is owned by an offshore holding company and doesn’t contribute to the local holding company.

The global company will book a one-off 8 million euro charge on the closure of the plant in the third quarter of this year, and plans to shift the manufacturing operations to its Asian units mainly in India, Thailand and Vietnam.

Huhtamaki will keep its food service operation in Henderson and molded fibre unit in Otahuhu which collectively employ about 320 people.

Huhtamaki cut its local bank debt to $3 million as at Dec. 31 from $5 million a year earlier, though it breached the terms of its agreement with Citibank by completing its financial statements too late. The loan, which has a nominal interest rate of 4.98%, falls due this year.

The company’s directors said they believe they will get a dispensation from the bank for the event, and a similar event occurred in subsidiary Huhtamaki New Zealand Ltd. during the 2009 financial year.

Note: An earlier story that included Huhtamaki’s other New Zealand interests in the local holding company’s earnings was incorrect. Huhtamaki (NZ) Holdings is the ultimate parent of the Henderson plant only.


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