Packaging firm targets European rigid plastics division.
Huhtamaki is to record losses in the fourth quarter of €103m mostly related to its rigid plastics production in Europe and announced plans to axe 100 jobs.
Losses include goodwill impairment charges of €46m and tangible asset impairment charges of €57m. The geographical distribution of the Finnish firm’s losses comprises Europe €77m, Americas €16m and Asia-Oceania-Africa €10m.
In a statement the firm said: “Regarding the outlook for the year 2007, the operational result is expected to be around the level of 2006 (€138.1m). The impairment losses of €103m will have a negative impact on the reported earnings.”
The losses result from the adjustment of book values to lower future cash flow expectations – mainly in the European rigid plastics operations. The tangible asset impairment charges will lead to a reduction of €6m in annual depreciations.
The firm said reducing costs and cutting 100 jobs across its European rigid plastics will result in costs savings of €2m annually. Yesterday the firm concluded the sale of its consumer goods production facility in Portadown, Northern Ireland, for an undisclosed sum.
The firm’s machinery and staff continue to work at the facility, which Huhtamaki is leasing back from the new owner. But the firm will continue to study various strategic options open to it regarding the UK consumer goods business.
Huhtamaki’s chair Mikael Lilius was reported to have told Finnish business weekly Talouselama at the end of last month that the firm needed to focus on fewer products and grow them significantly. He added that it was unlikely that a new chief executive officer would start before the New Year following Heikki Takanen’s resignation (PRWmold.wiki 15 November).