Domtar's CEO Expects Second Quarter Earnings to Dip on Pulp Mill Downtime, Costs
John D. Williams, President and CEO, Domtar.
July 12, 2013 - Domtar Corp. today provided an update on its financial performance for the second quarter of 2013. Domtar's management expects sales to be $1,312 million and estimates the operating loss to be between $30 and $35 million.
EBITDA before items1 will be between $130 and $135 million primarily due to a combination of costs related to maintenance shutdowns, lower pulp productivity, lower paper and pulp shipments and higher costs for freight. During the second quarter of 2013, paper and pulp shipments stood at 801,000 tons and 344,000 metric tons, respectively.
Estimated operating loss in the second quarter of 2013 includes a litigation settlement charge of $49 million, closure and restructuring costs of $18 million, a charge of $5 million related to the impairment and write-down of property, plant and equipment, and depreciation and amortization of $93 million.
Adjusting estimated operating loss for these four amounts yields EBITDA before items1.
"We had sub optimal pulp productivity and unusually high costs due to significant planned maintenance and delayed restarts in our pulp mills." said John D. Williams, President and Chief Executive Officer. "However, a closer look at our operations demonstrates that by quarter end we made very good progress on addressing production issues in the Pulp and Paper business. We remain confident that we will return to more normalized productivity levels across the business by the end of the third quarter."
Domtar will release its second quarter of 2013 financial results before markets open on Thursday, July 25, 2013.
1Non-GAAP financial measure. EBITDA before items is presented as a complement to enhance the understanding of operating results but not in substitution for GAAP results.
SOURCE: Domtar Corp.