Domtar posts fourth quarter profit
Feb. 6, 2007 - Domtar Inc. announced today earnings from continuing operations of $91 million ($0.39 per common share) in the fourth quarter of 2006 compared to a loss from continuing operations of $271 million ($1.18 per common share) in the fourth quarter of 2005 and earnings from continuing operations of $22 million ($0.09 per common share) in the third quarter of 2006.
For the full year of 2006, Domtar recorded a net profit of $328 million ($1.42 per common share) compared to a net loss of $388 million ($1.69 per common share) in 2005.
Commenting on the 2006 results, Raymond Royer, president and CEO, said: "The past year has been one of decisive actions for Domtar. With the support of our employees, we successfully executed the restructuring plan announced in November 2005. The plan resulted in the permanent closure of six paper machines at three mills, two sawmilling operations, as well as the implementation of cost reduction initiatives across all of the organization. More recently, Domtar sold its 50% investment in Norampac. Finally, throughout the year we continued to adjust our production to changing market conditions. All of these measures, coupled with the duties refund and higher overall selling prices, contributed to Domtar's strengthened financial position."
"Our transaction to combine Domtar with Weyerhaeuser's fine paper business and related assets is progressing well and is on schedule with an expected closing in March. The transaction will be submitted to our shareholders at a special meeting to be held on February 26th. This combination of assets is a transformational event for Domtar that will create the largest fine paper producer in North America, and we believe that our customers and shareholders will benefit from this leadership position in our core uncoated freesheet business," added Royer.
Although Domtar benefited from higher operating rates and increasing selling prices for papers and pulp, the North American demand for uncoated freesheet dropped in 2006 when compared to 2005. Looking into 2007, Domtar does not anticipate any significant changes to these demand trends for fine papers in North America, and the Company will continue to adjust its production to meet customer demand.
SOURCE: Domtar Inc.