Profit Up on Reduced Sales at SMI

Source from:  Tobacco Reporter 08/10/2009

Schweitzer-Mauduit International's Operating profit for its second quarter to the end of June, at $12.0 million, was up by 150 per cent on that of the second quarter of 2008, $4.8 million. Excluding pre-tax restructuring and impairment expenses, operating profit was $25.3 million during the second quarter of 2009, up from $8.5 million. The higher operating profit was primarily due to the sale of an improved mix of products, higher average selling prices, and cost savings and operating efficiencies, partially offset by higher non-manufacturing expenses and decreased sales volumes. Net sales, at $183.3 million, were down by nine per cent. Volume weakness during the quarter was said to have primarily reflected the withdrawal of certain non-tobacco paper products in Brazil, reduced base tipping paper sales following the shutdown of Lee Mills in the US, and decreased demand in North American markets, especially the US, which was impacted by a heavy US federal excise tax increase in April. Commenting on the results, Frederic Villoutreix, chairman and CEO, said the company's second quarter results further built on its first quarter earnings improvement and were indicative of the successful implementation of its operating and financial strategy. "We are benefiting from restructuring initiatives aimed at transforming our core manufacturing operations toward higher-value products," he said. "We drove strong results in the second quarter, exceeding our own expectations for operating profit margin gains and free cash flow." Enditem