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Resolute loss surges on restructuring costs, lower volumes

An aerial photo of the Resolute Forest mill in Brooklyn, N.S.

Resolute Forest Products

Resolute Forest Products Inc. beat expectations even though its net loss surged to $36-million in the fourth quarter due to several factors, including lower prices and volumes in its paper business as well as costs associated with idled operations.

The Montreal-based pulp, paper and lumber producer said Tuesday it lost 38 cents per diluted share for the period ended Dec. 31, compared to a net loss of $6-million or six cents per share a year earlier. Sales were unchanged at $1.1-billion.

Excluding $70-million of special items, the former AbitibiBowater earned $34-million or 35 cents per share, a 24-per-cent drop from the $45-million or 46 cents per share earned in the year-ago period.

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Analysts had expected Resolute would earn 18 cents per share in adjusted profits.

Resolute posted a $46-million operating loss in the quarter due to closure costs and impairment charges mainly related to the idling of a pulp mill and specialty paper machine in Fort Frances, Ont., the closure of a specialty paper machine in Laurentide, Que., and costs related to the sale of assets in Mersey, N.S.

For the full year, it lost $2-million or two cents per share on $4.5-billion of sales, compared to a $41-million, or 42 cents per share profit on $4.8-billion of sales.

Excluding $81-million in one-time costs, it earned $79-million or 81 cents per share, compared to $166-million or $1.71 per share.

CEO Richard Garneau said the company significantly improved its competitiveness over the past year by reducing costs, optimizing assets and strengthening its financial position.

He said the company has positioned itself for the future by adding pulp assets, committing to expand its lumber operations, investing in power co-generation plants and improving its paper assets.

Resolute also repurchased $67-million worth of its shares and redeemed an additional $85-million of debt.

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