The Cham Paper Group has closed another transformative year with a small profit. The financial year was challenging for the paper division on several levels. Extensive investment in upgrading machinery to increase capacity and efficiency in Carmignano and the relocation of coating operations from Cham to Italy resulted in greater restrictions on capacity and higher start-up costs than originally planned. The appreciation in the US dollar against the Euro also led to sharply increased cellulose costs, which could not be offset directly via higher prices. In the newly created real estate division, preparations for the transformation of the industrial site into a new quarter proceeded according to plan.
In 2015, the Group achieved revenue of CHF 194.3 million. This is 10.4% less than in 2014 (CHF 216.8 million), however, revenue grew by 2.4% in local currency. The operating profit came to a modest CHF 2.4 million (previous year: CHF 5.9 million), while the net result was just positive, at CHF 0.5 million (CHF 1.8 million). The profit has therefore improved slightly in the traditionally weaker second half thanks to the reduction in costs.
The trend in the paper division's revenue and profits did not match the opportunities presented by the market. The extensive investment in paper machine 4 in Carmignano to increase capacity and efficiency was completed on schedule, however, the start-up processes following the modifications turned out to be more difficult than expected and there was a delay in exploiting the increased production potential.
The gains in efficiency are not yet apparent in the results because of the 10% increase (caused by movements in exchange rates) in the cost of cellulose, which accounts for around 50% of manufacturing costs. The challenges involved in the relocation of coating operations for the manufacture of complex digital imaging products to Italy were underestimated; it was not possible to keep to the budget or the timetable and this depressed profitability. However, demand for the Cham Paper Group's speciality papers was satisfactory to good in all segments. The three divisions Consumer Goods, Industrial Release and Digital Imaging are well positioned strategically and their products are appreciated in the market. Tonnage sold increased by 2.3% despite the restrictions mentioned previously, and the paper division's net revenue reached CHF 193.4 million. The gross profit decreased from CHF 28 million to CHF 18.4 million as a consequence, in particular, of the increase of approximately CHF 9 million in the cost of cellulose. Thanks to the reduction in the cost base, a marginally positive operating profit (EBIT) before restructuring of CHF 0.7 million was achieved (previous year: CHF 8.6 million); the figure after restructuring was CHF 2.5 million (CHF 5.6 million).
