The results, for the year to the end of June 2004 show an 18% fall in pre-tax profits for the Australian paper merchanting and manufacturing group, to 74.5m (AUD$189.7m).

PaperlinX managing director and chief executive Tom Park said the fall in profits had been caused by an excess in supply of fine paper, currency fluctuations, lower selling prices and export revenues.

The excess in supply had led to lower-than-average selling prices compared to the previous year in all major markets, he said.

Sales were 2.4bn, an increase of 72% on the previous year, helped in part by the addition of Buhrmann's paper merchanting division.

PaperlinX revealed the total cost for the Buhrmann's acquisition amounted to 449m.

Higher sales volumes were achieved in merchanting in all major regions with total tonnage sold doubling for the year to 3.1m tonnes.

Operating profit for the paper merchanting division was 58m, an increase of 60% on 2003.

Sales for the division almost doubled for the year to 2.2bn.

Story by Andy Scott