Resolute Forest posts Q3 profit of US$31M; revenue down slightly at $1.15B
MONTREAL — Resolute Forest Products (TSX:RFP), the company formerly known as AbitibiBowater, swung to a profit in the third quarter, reversing a big year-earlier loss.
Resolute said Friday that it earned net income of US$31 million or 32 cents per diluted share on sales of US$1.15 billion in the period ended Sept. 30.
“We’re pleased with these results, considering the specific challenges we faced in the quarter and the unexpected extent of the maintenance required to bring our recently acquired St. Felicien mill up to par,” said Richard Garneau, president and chief executive officer.
“Our cost-focused strategy allowed us to maintain attractive margins in the paper and wood products segments despite lower shipments overall. This is the direct result of our focus on the items we control: selling only profitable tons and maintaining world-class operational standards.”
Resolute took a $10-million charge for annual maintenance and work to improve the operational and environmental performance of the St. Felicien mill.
Resolute produces newsprint, commercial printing papers, market pulp and wood products. The company owns or operates 21 pulp and paper mills and 22 wood products mills in Canada, the United States and South Korea.
In June, it closed Nova Scotia’s Bowater Mersey Paper Co. and has been seeking a buyer for the 220,000 hectares it owns in the province.
The Montreal-based company in August said it was preparing to restart its paper mill in Dolbeau-Mistassini, Que., providing direct employment for 135 people. The community is about 370 kilometres northwest of Quebec City in the Lac-Saint-Jean region
The said the decision follows approval of electricity sales from its Mistassini cogeneration plant to Hydro-Quebec, the provincial power grid.
Resolute said in September that its strong cash position allowed it to redeem another $85 million of debt due in 2018 and repurchased 3.7 million shares of its common stock under the existing $100-million share repurchase program.