EARNINGS POSITIVE
Forest products producers in both eastern and western Canada reported positive earnings last week for the first quarter of 2010. Montreal, Que.-based Domtar reported net earnings of $58 million for Q1 2010, compared to a net loss of $45 for the same quarter of 2009. At the other end of the country, Vancouver, B.C.-based Canfor Corporation reported net income of $32.5 million for the first quarter of 2010, compared to a net loss of $69.9 million for the first quarter of 2009. Domtar’s Q1 2010 earnings were down from reported fourth quarter 2009 net earnings of $124 million, while Canfor’s Q1 2010 earnings were up from a net loss of $9.1 million for the fourth quarter of 2009.
Domtar reported sales in the first quarter of 2010 of $1.5 billion. In a company press release, they said the company had first quarter earnings of $69 million before certain items, which included: A refundable excise tax credit for the production of alternative bio fuel mixtures of $25 million ($18 million after tax); A charge of $22 million ($16 million after tax) related to the impairment and write-down of property, plant and equipment; Closure and restructuring costs of $20 million ($14 million after tax); and a gain on sale of property, plant and equipment of $1 million ($1 million after tax).
“Despite a still modest economic recovery we recorded strong financial results due to price increases and higher pulp, paper and wood shipments,” said John D. Williams, Domtar’s president and CEO.
Canfor also credited significant increases in lumber and pulp prices as the major reason for the company’s improved results for the quarter, but company president and CEO Jim Shepard said the increases were supply driven. “While we are very pleased to see the rise in North American lumber prices, we recognize the increase is largely due to supply factors rather than to any significant increase in U.S. construction activity,” he said.
|
