Abitibi-Consolidated Swings to Third Quarter Profit
Nov. 6, 2007 - Abitibi-Consolidated Inc., a wholly-owned subsidiary of AbitibiBowater Inc., today reported third quarter 2007 net earnings of $54 million, or 12 cents a share, compared to a loss of $48 million, or 11 cents, a share in the third quarter of 2006.
For the nine-month period ending September 30, 2007, the company recorded net earnings of $132 million, or 30 cents a share, compared to net earnings of $76 million, or 17 cents a share, for the same nine-month period last year.
Although not a GAAP measure, the third quarter results before the impact of specific items would have been a loss of $126 million, or 28 cents per share, compared to a loss of $54 million, or 12 cents a share, in the third quarter of 2006. The quarter's results included the following after-tax specific items: a gain of $168 million on translation of foreign currencies, the positive impact of a $24 million gain on the disposal of a portion of the company's timberlands located in Georgia and South Carolina, as well as a $7 million expense related to the recently completed merger with Bowater Incorporated.
In the third quarter of 2007, the company posted an operating loss of $85 million before specific items, compared to an operating profit of $10 million in the third quarter of 2006. The Newsprint, Commercial Printing Papers and Wood Products segments had operating losses of $19 million, $38 million and $28 million respectively. Before specific items, the $95 million reduction in operating results in the third quarter of 2007 was mainly attributable to lower prices in the company's three segments, the unfavourable impact of a stronger Canadian dollar and the devaluation of finished products inventories.
Q3 vs. Q2 2007 Summary
- Sales of $999 million vs. $1.06 billion ($1.18 billion in Q3 2006)
- EBITDA of $21 million vs. $42 million ($120 million in Q3 2006)
- U.S. newsprint prices lower by approximately US$23 per tonne
- Newsprint costs lower by $42 per tonne
- Demand for uncoated groundwood papers continues to improve
- Due to a year-over-year decrease of nearly 31% in U.S. housing starts, the company reduced its wood products production during the third quarter.
"The results for the quarter are a reflection of the challenging market conditions and impact of the Canadian dollar. Our merger with Bowater is a first step in meeting these challenges," said John W. Weaver, president and CEO of Abitibi-Consolidated. "Now that the merger has closed, we are moving swiftly to fully integrate the company and implement our new business priorities," added Weaver.
SOURCE: Abitibi-Consolidated Inc.