Cottonsoft makes small profit in 2013 after FX loss
By Pam Graham
July 10 (BusinessDesk) – Cottonsoft, the maker of Tuffy paper towels and Kiwisoft toilet tissue, made a small profit in 2013 after booking a sizeable foreign exchange loss.
The company which imports paper and manufactures it into a range of consumer products reported a profit of $57,000 in the year to Dec. 31, 2013 compared to a loss of $1.05 million in 2012. Revenue rose to $82.2 million from $77.2 million a year earlier.
The notes to the accounts show a $1.23 million net foreign exchange loss in 2013 compared to a $1.11 million net foreign exchange gain in 2012.
The New Zealand dollar is near a post-float record, which makes imports cheaper. But all year it has been expected to come under pressure from a resurgent US dollar and importers likely took up positions for that prospect.
The NZ dollar was recently at 88.17 cents on Thursday.
Bank of New Zealand has upgraded its forecasts for the currency, saying it will still be 84 US cents by the end of September, up from a previous forecast of 81 cents. It will be 80 cents by the end of the year from the previous forecast 79 cents.
The accounts show Cottonsoft’s finance income was down to $62,000 from $1.1 million last year. No dividend was paid in 2013 or in 2012.
Cottonsoft, which also has the Paseo brand, received a capital injection from its foreign owner Asia Pulp and Paper after breaching its bank covenants in 2011.
The company was in the news in 2004 when Carter Holt Harvey alleged it breached the Fair Trading Act by selling toilet paper made from imported paper as New Zealand-made. Carter Holt owned a rival tissue company at the time which it subsequently sold to Sweden’s SCA.
Financial statements recently filed by rival SCA’s New Zealand unit, PEPSCANZ Ltd, show the maker of Sorbent and Purex toilet paper, Treasures nappies and Libra tampons reported profit of $27.5 million in calendar 2013, as revenue fell 3.1 percent to $247.6 million.