Steep fall in woodfree paper demand burdens Lecta’s financial results for 2020.
Lecta continues to pursue one of its key objectives, which is to reduce reliance on the market for woodfree coated paper. The company's next step in the direction is the ongoing rebuild of PM 8 at its Condat mill in France to produce release liner in future. The PM, which can produce 200,000 tpy of woodfree coated paper, was idled in 2019. The company aims to start producing release liners in early summer this year. The project is reportedly on track and close to the budget.
Lecta’s financial results for last year were severely impacted by the Corona pandemic and restructuring. Deliveries and sales, especially for Lecta’s woodfree coated paper division, suffered due to plunging demand and poor selling prices. Operating earnings moved into the negative zone to -€206m (2019: €18m), which include goodwill impairment of €118m and recapitalisation costs of €42m. Debt refinancing earned the company financial income of €424m, nudging the net result for the reporting year to €165m compared with the net loss of -€51m for the 2019 financial year.
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