July 28, 2020 / 6:57 PM / 10 days ago

Portugal's Navigator net profit drops 53% as virus hits paper consumption

LISBON, July 28 (Reuters) - Portugal's Navigator Company on Tuesday reported a 53% drop in first-half net profit to 44 million euros ($52 million), due to a sharp downturn in global paper consumption during lockdowns imposed to fight the spread of the coronavirus outbreak.

Navigator, which sells its pulp and paper products in more than 100 countries on five continents, said in a statement it saw total sales fall 18.6% to 695 million euros during the first six months of the year.

"The significant slowdown in the economy had a strong impact on the graphic papers industry, but despite the strict lockdowns imposed, the severest impact was felt by the printing industry segment," said the company, which is controlled by the Portuguese conglomerate Semapa.

There were significant variations between European markets, Navigator said, with consumption dropping less in countries where measures were not as severe, compared with those where strict lockdowns were enforced.

First-half EBITDA (earnings before interest, taxes, depreciation and amortisation) totalled 140 million euros, down 32%, it said.

Though the outlook for the rest of the year is still uncertain, the company said there were a number of recent positive signs.

"Navigator is now receiving new orders at a pace close to normal for the first time this year," it said, adding that the group's paper machines were operating again.

But the "risk remains of a second wave of the pandemic, with the negative impact this may bring for exporting companies like Navigator", it said.

$1 = 0.8530 euros Reporting by Catarina Demony Editing by David Holmes

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