Powerflute sees more challenging trading in H2

Powerflute OYJ continues to perform well in the first four months of 2016, with trading results broadly in line on the year, but expects the second half to be more challenging.

Shares in the paper and packaging group were down a little more than 12% this afternoon.

"In Coreboard and Cores, the economic slowdown in China impacted on results in the region, but businesses in the US continued to perform strongly and some underlying improvement on the prior year was achieved in Europe," the company said.

In Packaging Papers, the order situation continued challenging and margins remained under pressure due to softening of demand in containerboard markets worldwide and the impact of capacity increases in SC-fluting, which would take some time for the market to absorb.

"Although the second half of the year is expected to be more challenging, the group remains well positioned in attractive markets," it said in a statement.

"We expect that further benefits from the operational improvement programmes currently underway in each of our businesses should help to mitigate the impact of more challenging market conditions."