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Abitibi launches operations review

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MONTREAL—AbitibiBowater Inc. is launching a 30-day review of operations following the combination of Abitibi-Consolidated Inc. and Bowater Inc., completed Oct. 29.

Abitibi-Consolidated separately said today it earned third-quarter net income of $54 million, 12 cents a share, compared with a year-earlier loss of $48 million, 11 cents per share.

However, excluding one-time items, the third-quarter loss was $126 million, 28 cents per share, compared with a year-ago loss of $54 million, or 12 cents a share.

Sales were down 15 percent to $999 million from $1.18 billion.

The quarter’s after-tax gains included $168 million on translation of foreign currencies and $24 million on the sale of timberlands in Georgia and South Carolina.

There also were $7 million in merger expenses.

Abitibi said its third-quarter operating loss was $85 million—$19 million in newsprint, $38 million in commercial printing papers, and $28 million in wood products.

The year-ago quarter had a slim operating profit of $10 million.

“The results for the quarter are a reflection of the challenging market conditions and impact of the Canadian dollar,” said Abitibi-Consolidated CEO John Weaver.

“Our merger with Bowater is a first step in meeting these challenges,” Weaver added. “Now that the merger has closed, we are moving swiftly to fully integrate the company and implement our new business priorities.”

These priorities include an acceleration of $250 million in annualized synergies. Those efficiencies—previously forecast to be realized over two years—now are to be achieved by the end of the first quarter of 2009.

AbitibiBowater also aims to reduce debt by $1 billion within three years.

“Over the next 30 days, AbitibiBowater’s executive team will complete a strategic review of each business and develop complete action plans for achieving these business priorities, inclusive of sales and marketing plans,” the combined company stated.

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