Cropper revealed that sales turnover was 9% lower in the three months to 1 July 2012 compared to Q1 of 2011, whilst tonnage of paper sold saw an 11% year-on-year decrease.
Export sales volume for the speciality paper division was also down 18% in Q1.
Cropper said: "The economic uncertainty, which led to the loss of confidence among customers in many export paper markets in the second half of last year, shows no immediate sign of lifting."
However speciality paper was the only division to experience a decline against the same period last year. Technical fibres products saw increased sales of 23%, while converting sales were up 19% due to a recovery of volumes into the art and sign and display markets.
Overall, the company traded profitably in the opening quarter of 2012, according to Cropper.
The Kendal-based company booked an £800,000 redundancy provision in the last financial year to lighten its UK staff base by 8% by the end of 2012, which affected 40 jobs, mainly across the speciality papers division.
The company predicted that this would result in an immediate saving of £300,000 at the close of the current financial year and £1m per annum thereafter.
Cropper said that the workforce reduction plans were on track and that no compulsory job cuts would be made as a result.
He claimed that the restructuring process, along with recent investments and new business such as its foray into luxury and packaging papers, was expected to improve profitability of its speciality papers over the coming financial year.
He added: "Despite the troubled economic climate, there are a number of significant opportunities within our reach. I am confident that we have the resources and means of seizing these."
