Domtar Reports Loss of $45 million
Monday, May 04, 2009
Press release from the issuing companyMONTREAL -- Domtar Corporation today reported a net loss of $45 million ($0.09 per share) for the first quarter of 2009 compared to a net loss of $676 million ($1.31 per share) for the fourth quarter of 2008 and net earnings of $36 million ($0.07 per share) for the first quarter of 2008. Sales for the first quarter of 2009 amounted to $1.3 billion. Excluding items(1) listed below, the Company lost $38 million ($0.07 per share(1)) for the first quarter of 2009 compared to a loss of $20 million ($0.04 per share(1)) for the fourth quarter of 2008 and earnings of $25 million ($0.05 per share(1)) for the first quarter of 2008.
First quarter 2009:
- Refundable excise tax credit for the production and use of alternative bio fuel mixtures of $46 million ($28 million after tax);
- Charge of $35 million ($21 million after tax) related to the write-down of property, plant and equipment at the Plymouth, North Carolina, mill; and
- Closure and restructuring costs of $24 million ($14 million after tax).
Fourth quarter 2008:
- Charge of $387 million ($270 million after tax) related to the impairment and write-down of property, plant and equipment and intangible assets;
- Charge of $321 million ($321 million after tax) related to the impairment of goodwill;
- Charge of $52 million related to a valuation allowance on Canadian deferred income tax assets;
- Closure and restructuring costs of $28 million ($18 million after tax);
- Gain on debt repurchase of $12 million ($8 million after tax); and
- Costs of $5 million ($3 million after tax) related to synergies and integration.
First quarter 2008:
- Reversal of a $23 million provision ($17 million after tax) due to the early termination of an unfavorable contract by the counterparty;
- Costs of $8 million ($5 million after tax) related to synergies and integration; and
- Closure and restructuring costs of $1 million ($1 million after tax).
"We continue to face a very hostile environment in pulp with prices reaching cyclical lows. To bring our system back in balance we have announced the indefinite closure of our Woodland pulp mill and idled our Dryden pulp mill for ten weeks," said John D. Williams, President and Chief Executive Officer. "Our people have responded remarkably well to the mandate of right-sizing the organization, improving its operating performance and reducing procurement costs and discretionary spending. We have generated free cash flow and our paper inventories have been significantly reduced despite a very weak demand environment. This could prove to be a catalyst as demand for fine paper levels off," added Mr. Williams.
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