Fiberweb plc, the international nonwoven fabrics producer, today published a pre-close trading update, ahead of preliminary results for the twelve month period ending 31 December 2008 , which will be announced in February 2009 .
The current economic environment continues to impact Fiberweb's markets to some degree. While industrial segments, especially those that are construction-related, have been particularly impacted, hygiene segments continue to demonstrate their more defensive and stable characteristics.
As a result, the Board reported that, since the issue of its Interim Management Statement on 30 October 2008, underlying (1) operating profit and operating margin have continued to track ahead of the prior year .
The fall in oil prices and weak general polymer demand have started to produce lower raw material prices and utility costs, compensating for some volume weakness.
Management remains focused on margin improvement and cost control in particular. Progress in working capital reduction has continued and net debt remains below forecast levels in constant currency terms. However, the significant and sustained weakening of sterling relative to the US Dollar and the Euro in recent months has led to net debt valued in sterling being higher than expected.
Despite this translation effect, Fiberweb expects to be fully compliant with banking covenants at the year end and the expected out-turn for the full year to 31 December 2008 remains in line with management expectations.
(1) Underlying profit measures are before restructuring costs and other non-recurring items.
Author: Billy Hunter