MONTREAL—Paper producer AbitibiBowater Inc. says it has turned the corner to restoring profitability despite continued declines in the newspaper industry and a protracted sump in the U.S. housing industry.
At the first annual meeting of the merged Abitibi-Consolidated and Bowater Inc. yesterday, it also was announced executive chairman John Weaver will retire July 1, but will continue to serve as non-executive chairman and a member of the board.

The company told shareholders cost reductions at local mills, particularly in eastern Canada, product price increases, and paper grade conversions have improved the company’s financial position.
“Much work remains to be done,” said CEO David Paterson.
“Yet there are clear indications that the decisive actions we’ve already taken are paying off, and that things are beginning to unfold as our management team intended when we devised our no-nonsense, results-oriented turnaround strategy,” he added.
Weaver, who was CEO of Abitibi before it merged with its U.S. rival, said leaving the company “at this stage of my life is the right thing to do.”
“I am very proud of how far we have come as a combined company in such a short period of time,” Weaver said in a prepared statement.
A successor was not immediately named.
“Many challenges lie ahead, and I am confident that the right people are in place to successfully meet them head on,” Weaver noted.
“John has been key in forging the new company’s personality and setting the foundation for a bright future,” said Paterson.
That foundation was forged through a painful first phase of restructuring that resulted in mill closures, layoffs, and one million tonnes of capacity reductions.
The second phase promises to be less onerous because of cost cuts at local mills and improved pricing.
“At this point, no additional paper mill closures or idlings have been announced—nor have they been completely ruled out,” Paterson said.
“We feel we have already gone a long way towards tackling the major issues we need to address.”
AbitibiBowater saw a $100-million pre-tax earnings improvement in the first quarter of 2008 compared to the previous quarter. That momentum is building in the second quarter, Paterson noted.
Part of its future direction will see a shift in its environmental strategy highlighting its commitment to environmental sustainability at the first annual meeting of the merged corporation.
The paper and wood products maker—which lost $248 million (U.S.) in the first quarter on sales of $1.7 billion and whose share price has fallen from $35 (Cdn.) in October to $12.78 on Wednesday—will continue to focus on reducing overall greenhouse gas emissions with the goal of becoming a carbon-neutral enterprise.
AbitibiBowater also plans to have all of its woodlands certified as sustainable by year-end, up from 95 percent now—more than any other company in the world.
And as one of the world’s largest recyclers of newspapers and magazines, it aims to enhance the sustainability of its fibre sourcing. At the same time, it has developed new paper products that use less water, energy, and fibre.