MIRA INFORM REPORT

 

 

Report No. :

324185

Report Date :

01.06.2015

           

IDENTIFICATION DETAILS

 

Name :

PAPER AUSTRALIA PTY LTD

 

 

Registered Office :

307 Ferntree Gully Rd Mount Waverley, Vic 3149

 

 

Country :

Australia

 

 

Financials (as on) :

31.12.2014 (Consolidated)

 

 

Date of Incorporation :

1939

 

 

Legal Form :

Private Company

 

 

Line of Business :

Manufacture and distribution of paper and stationery products

 

 

No. of Employee :

1308

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Australia

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 


 

AUSTRALIA ECONOMIC OVERVIEW

 

The Australian economy has experienced continuous growth and features low unemployment, contained inflation, very low public debt, and a strong and stable financial system. By 2014, Australia had experienced more than 20 years of continued economic growth, averaging more than 3% a year. Demand for resources and energy from Asia and especially China has grown rapidly, creating a channel for resources investments and growth in commodity exports. The high Australian dollar has hurt the manufacturing sector, while the services sector is the largest part of the Australian economy, accounting for about 70% of GDP and 75% of jobs. Australia was comparatively unaffected by the global financial crisis as the banking system has remained strong and inflation is under control. Australia has benefited from a dramatic surge in its terms of trade in recent years, stemming from rising global commodity prices. Australia is a significant exporter of natural resources, energy, and food. Australia's abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron, copper, gold, natural gas, uranium, and renewable energy sources. A series of major investments, such as the US$40 billion Gorgon Liquid Natural Gas project, will significantly expand the resources sector. Australia is an open market with minimal restrictions on imports of goods and services. The process of opening up has increased productivity, stimulated growth, and made the economy more flexible and dynamic. Australia plays an active role in the World Trade Organization, APEC, the G20, and other trade forums. Australia has bilateral free trade agreements (FTAs) with Chile, Malaysia, New Zealand, Singapore, Thailand, and the US, has a regional FTA with ASEAN and New Zealand, is negotiating agreements with China, India, Indonesia, Japan, and the Republic of Korea, as well as with its Pacific neighbors and the Gulf Cooperation Council countries, and is also working on the Trans-Pacific Partnership Agreement with Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.

 

Source : CIA

 

 

Company name and address                                                                  

 

PAPER AUSTRALIA PTY LTD

 

T/AS AUSTRALIA PAPER

 

ACN: 061 583 533

ABN: 63 061 583 533

 

 

Summary Panel

 

Established

1939

 

Incorporated

1993

 

Line of Business

Manufacture and distribution of paper and stationery products

Status

Trading

Adverse Listings

Nil

 

 

 

EXECUTIVE SUMMARY

 

For the financial year ended 31 December 2014 the subject recorded consolidated revenue of $784,659,000, which resulted in an operating Loss before tax of $29,127,000 and an operating Loss after tax of $37,491,000.

 

On 24 February 2015 the subject announced the closure of the manufacturing facilities at Shoalhaven NSW. The closure is expected to be completed by the end of 2015.

 

As at 31 December 2014 the subject recorded consolidated Working Capital of $69,083,000 and a current ratio of 1.27 to 1 indicating satisfactory liquidity levels.

 

Consolidated Net Assets totalled $547,991,000 as at 31 December 2014. After deducting intangibles of $698,000 this results in a Net Worth of $547,293,000.

 

Despite the trading losses, in our opinion the subject has the asset backing to undertake a credit facility with a $240,513 exposure. For added security we would recommend seeking intercompany guarantees from the holding entity.

 

 

CORPORATE SEARCH

 

Company Type                          Australian Proprietary Company

 

INCORPORATED                      7 September 1993

 

REGISTERED ADDRESS          307 Ferntree Gully Rd

                                                MOUNT WAVERLEY, VIC 3149

 

SHARECAPITAL                        $662,280,000                

 

SHAREHOLDERS                     NIPPON PAPER INDUSTRIES CO LTD

                                                Holds 3,208,084,653 shares

 

DIRECTORS                             OBAYASHI, YAUHITO

Resident overseas

 

NUMATA, KENICHI

Resident overseas

 

                                                NOZAWA, TORU

                                                Resident overseas

 

KASHIMA, KUNIHIKO

202, 578 St Kilda Rd

MELBBOURNE, VIC 3004

 

SECRETARY                            FELICITY ANNE WALSH

                                                PETER JAMES WILLIAMS

 

           

SECURITY INTERESTS

 

Effective 30 January 2012 the Personal Property Securities Register (PPSR)  was introduced to give the different Commonwealth, State and Territory laws and registers regarding security interests in personal property under one national system.

 

As a result of PPS Reform a number of existing Commonwealth, State and Territory personal property security registers will close. Interests registered on existing security interest registers will be migrated to the national PPS Register. Subsequently Registered Charges are no longer lodged with the Australian Securities and Investments Commission (ASIC).

 

Please contact us should you require a search of the PPSR.

 

 

BUSINESS STRUCTURE

 

TRADING ADDRESS                 307 Ferntree Gully Rd

MOUNT WAVERLEY, VIC 3149

                                   

POSTAL ADDRESS                  Private Bag

                                                MT WAVERLEY, VIC 3149

 

TELEPHONE                             (613) 8540 2300

 

FACSIMILE                               (613) 8540 2280

 

WEBSITE                                  www.australianpaper.com.au

 

TRADING NAMES                     AUSTRALIAN OFFICE

                                                AUSTRALIAN PAPER

                       

BRANCHES                              RAGLAN, ST PRESTON, VIC

WORTH ST CHULLORA, NSW

ALBANY ST FYSHWICK, ACT

EAST ST BROMPTON SA

COLLIER ST BASSENDEAN, WA

COBALT ST CAROLE PARK QLD

 

MILL                                         MARYVALE VIC

                                                SHOALHAVEN NSW

                                               

HOLDING ENTITY                      NIPPON PAPER INDUSTRIES CO LTD –JAPAN

 

CONTROLLED ENTITIES           AUSTRALIA PAPER P/L AUSTRALIA

PAPER PRODUCTS MARKETING P/L - AUSTRALIA

PAPER PRODUCTS TAIWAN LTD - TAIWAN

PAPER PRODUCTS MARKETING HONG KONG LTD HONG KONG

PAPER PRODUCTS MARKETING SINGAPORE PTE LTD – SINGAPORE

PAPER PRODUCTS MARKETING USA INC- USA

JOSEF FROHLEN PAPIERGROSSHANDLUNG-WILLI REDDEMAN IMPORT- EXPORT GMBH - GERMANY

 

BANK                                       NATIONAL AUSTRALIA BANK

                                                Branch: Melbourne, VIC

                                               

EMPLOYEES                            1308

 

 

BACKGROUND

 

The subject was incorporated in Victoria on 7 September 1993 as Decurion P/L, changing name on 14 October 1993 to Paper Merchant Holdings P/L, adopting the current style on 23 June 1998.

 

In 2009 the subject was acquired by Nippon Paper Group for $700 million.

 

Operations were founded in Australia in 1939.

 

The Nippon Paper Group is a leading global pulp and paper manufacturing group which is principally based in Japan and employs almost 15,000 people.

 

 

OPERATIONS

 

The subject operates in the manufacture of paper and office products including a range of office stationery, envelopes papers and boards for the publishing, packaging and general print sectors of the printing industry.

 

Brands include Reflex, Olympic, Tudor, Optix and Queen’s Slipper.

 

Activities are conducted from premises located at the above listed trading address.

 

 

ADVERSE

                                               

A search of of failed to trace any litigation listed against the subject at that date.

 

 

FINANCES

 

From the subjects most recently lodged financial statements, it is noted that for the financial year ended 31 December 2014 the subject recorded consolidated revenue of $784,659,000, which resulted in an operating Loss before tax of $29,127,000 and an operating Loss after tax of $37,491,000.

 

The trading results for the last financial year were attributable to a high Australian dollar. The stronger dollar results in cheaper imports and puts increased pricing pressure on locally produced product sales as well as reducing translation returns on exports.

 

Below is a summary of the subject’s income results for the past two financial years.

 

Paper Australia Pty Ltd - consolidated

 

As at 31 December 2014

As at 31 December 2013

Change (%)

Revenue

$784,659,000.00

$745,261,000.00

5.29%

Profit b/tax

($29,127,000.00)

($17,590,000.00)

65.59%

Profit a/tax

($37,491,000.00)

($26,528,000.00)

41.33%

Net Profit Margin

-4.78%

-3.56%

-1.22%

 

During fiscal 2014, the subject recorded a deficiency in consolidated Net Cashflows from operating activities totalling $6,796,000.

 

On 10 October 2012 the subject announced that it would be proceeding with a $90 million investment program to construct a premium recycled waste paper plant and associated infrastructure at the Maryvale Mill in Gippsland. The plant is expected to be complete in 2014.

 

On 24 February 2015 the subject announced the closure of the manufacturing facilities at Shoalhaven NSW. The closure is expected to be completed by the end of 2015.

 

The subject also announced a restructure of the corporate operations together with the amalgamation of the Australian Office, AP Print and AP Packaging Sales, Marketing, Customer Service and Product Development functions into one domestic sales team.

 

As at 31 December 2014 the subject recorded consolidated total current assets of $329,179,000. They included cash of $41,026,000, receivables of $101,252,000 and inventories of $183,519,000.

 

Current liabilities at the same date totalled $260,096,000 and included payables of $122,019,000 and borrowings of $90,608,000.

 

As at 31 December 2014 the subject recorded consolidated Working Capital of $69,083,000 and a current ratio of 1.27 to 1 indicating satisfactory liquidity levels.

 

Consolidated Net Assets totalled $547,991,000 as at 31 December 2014. At this date, the subject further recorded a Debt to Equity ratio of 0.69 to 1 showing low levels of gearing. After deducting intangibles of $698,000 this results in a Net Worth of $547,293,000.

 

Paper Australia Pty Ltd - consolidated

 

As at 31 December 2014

As at 31 December 2013

Change (%)

Revenue

$784,659,000.00

$745,261,000.00

5.29%

Profit b/tax

($29,127,000.00)

($17,590,000.00)

65.59%

Profit a/tax

($37,491,000.00)

($26,528,000.00)

41.33%

Net Profit Margin

-4.78%

-3.56%

-1.22%

Current Assets

$329,179,000.00

$346,842,000.00

-5.09%

Non Current Assets

$596,169,000.00

$572,538,000.00

4.13%

Total Assets

$925,348,000.00

$919,380,000.00

0.65%

Current Liabilities

$260,096,000.00

$274,679,000.00

-5.31%

Non Current Liabilities

$117,261,000.00

$57,304,000.00

104.63%

Total Liabilities

$377,357,000.00

$331,983,000.00

13.67%

Net Assets

$547,991,000.00

$587,397,000.00

-6.71%

Working Capital

$69,083,000.00

$72,163,000.00

-4.27%

Current Ratio

1.27

1.26

0.23%

Debt to Equity

0.69

0.57

21.84%

 

 


TRADE SURVEY

 

Trade payment in the past 4 months have traced the following data for the subject. 

 

Total Owing: $4,062

Total Past Due: $403

Average Late Payment Days: 6

 

Within terms: $3,660

1 – 30 days past due: $403

31 – 60 days past due: $0

61 – 90 days past due: $0

91+ days: $0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.63.76

UK Pound

1

Rs.97.80

Euro

1

Rs.69.91

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

ANK

 


 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.