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Domtar reports net earnings of $20 mn in Q3 2019

05 Nov '19

2 min read

Pic: Domtar

Domtar Corporation has reported net earnings of $20 million ($0.32 per share) for the third quarter ending September 30, 2019, compared to net earnings of $18 million ($0.28 per share) for the second quarter of 2019 and net earnings of $99 million ($1.57 per share) for the third quarter of 2018. Sales for the third quarter of 2019 were $1.3 billion.

Operating income was $29 million in the third quarter of 2019 compared to operating income of $34 million in the second quarter of 2019. The decrease in operating income in Q3 was the result of lower selling prices in pulp, market-related downtime costs and the Espanola outage.

When compared to the second quarter of 2019, manufactured paper shipments were down 1 per cent and pulp shipments increased 12 per cent. The shipment-to-production ratio for paper was 103 per cent in the third quarter of 2019, compared to 98 per cent in the second quarter of 2019. Paper inventories decreased by 19,000 tons and pulp inventories decreased by 9,000 metric tons when compared to the second quarter of 2019.

“Our results in paper improved with lower maintenance and raw material costs offsetting market related downtime costs. Our paper machines ran well and cost performance was strong, resulting in a 300 basis point margin expansion for this business,” said John D Williams, president and chief executive officer of Domtar. “In pulp, downward price adjustments continued in most regions but we are seeing increasing signs of improvement in supply and demand fundamentals.”

“In personal care, EBITDA and margin performance were one of the best in several quarters as we continue to make excellent progress in executing our business plan, with a strong focus on commercial initiatives, cost performance and delivering on our margin improvement plan,” added Williams.

For the fourth quarter, maintenance is expected to be higher while paper is expected to be negatively impacted in part by a seasonally unfavorable mix. The company anticipates some volatility in softwood and fluff pulp markets while personal care is expected to benefit from its margin improvement plan and increased sales driven by a stronger order book.

Domtar is a leading provider of a wide variety of fiber-based products including communication, specialty and packaging papers, market pulp and absorbent hygiene products.

Fibre2Fashion News Desk (PC)