Finnish packaging group Huhtamaki (Espoo; www.huhtamaki.com) has reported an operating profit (EBIT), excluding non-recurring charges of EUR 165m, of EUR 91m for 2008, compared with EUR 136m in 2007 and in line with its profit advice issued in December 2008. Including the charges, for asset and goodwill impairment and restructuring, the company reported an operating loss of EUR 74.5m. Sales fell by 2% year-on-year to EUR 2.26 bn due to currency effects. Demand for consumer packaging remained stable during 2008, despite the economic uncertainty at the end of the year, the company said.

Operating profit excluding non-recurring charges in the flexible and films global unit fell from EUR 46.8m in 2007 to EUR 24.8m in 2008 on sales down 2% year-on-year at EUR 691m. In flexibles, sales were weak in Europe and North America as a result of softness in the pet food market. The films business saw a year-on-year fall in sales. To address underutilised capacity and lack of profitability, Huhtamaki is to close its flexible packaging operations in Malvern, Pennsylvania / USA at the end of the first quarter of 2009, affecting 80 employees. The site will be dedicated to the company’s films business.

The rigid packaging business was realigned at the end of the year as announced in December 2008 – see Plasteurope.com of 18.12.2008 – with the foodservice business in Europe, Asia and Oceania merging into one segment. The rigid plastic consumer goods operations have been reorganised as a separate business, which is under strategic review and may be sold. During the first half of 2009, around 170 jobs will be lost in Oceania and Europe as a result of the measures, of which 160 will be in Europe. It is expected that the realignment will reduce costs in the business by EUR 8m on an annual basis.

The rigid Europe business reported an operating profit excluding non-recurring charges of EUR 9.0m, compared with EUR 11.6m in 2007 on sales unchanged at constant currencies of EUR 626m. Growth seen in the first half of the year turned into a decline in the second half, Huhtamaki said. In consumer goods, market softness continued in Germany and discontinued operations in the UK had a negative impact as the company ceased rigid plastic production in Portadown and Gosport with the loss of 140 jobs. The UK consumer goods business made a loss in 2008 on annual sales of around EUR 30m. The rigid packaging site in Karlholmsbruk / Sweden was also closed at the end of 2008 with the loss of 40 jobs. The foodservice business showed growth driven by strong performance in eastern Europe.

The flexibles and films global business accounted for 30% of sales in 2008 (31% in 2007), rigid Europe was responsible for 28% (27%), moulded fibre Europe 6% (6%), rigid and moulded fibre Americas 27% (26%) and rigid and moulded fibre Asia-Oceania-Africa 9% (10%).

The company expects a relatively stable market in 2009 with costs of polymer-based raw materials to be lower than the average in 2008. In the short-term, pricing and supply chain initiatives, control over costs and capital spending, positive cash flow generation and net debt reduction continue as key focus areas for the company.