The paper merchanting and office products group, which includes UK merchants Howard Smith Paper, Robert Horne Group and M6 Papers, reported a 12.3% fall in net sales in its paper merchanting business to 464m (eur658.6m) in the second quarter.

And the merchanting business earnings before interest, tax and amortisation fell 31.3% to 8.8m.

Australian merchanting and paper production group PaperlinX offered Buhrmann 522m for its paper merchanting division in June (PrintWeek, 26 June). Buhrmann will use the proceeds to cut its debt.

Buhrmann corporate communications director Ewold de Bruijne said the deal was moving along as anticipated and was on schedule for completion by the end of the third quarter.

Group net sales totalled 1.5bn, down 16.8% on the second quarter of 2002, while net profits slumped by almost three-fifths to 14.6m.

De Bruijne said Buhrmann was pleased that the cost-cutting measures were proceeding ahead of schedule, but further cuts would follow and would affect the paper merchanting divisions back-office functions.

The European market is still not improving at the moment, and we want to continue with the work on improvements, he said.

The group wants to realise annual savings of around 42m from 2004.