Catalyst Paper Record Greater Net Loss in First Quarter
RICHMOND, BC—April 28, 2010—Catalyst Paper (TSX:CTL) has recorded a net loss attributable to the company of $44.1 million ($0.12 per common share) on sales of $273.3 million for the first quarter of 2010. The net loss increased from $35.8 million in the preceding quarter ($0.09 per common share), due to declining specialty printing paper prices and additional production curtailment. Higher restructuring, input and maintenance costs further impacted Q1 results.
Before specific items, Catalyst posted a net loss attributable to the company of $37.6 million ($0.10 per common share), in contrast to $21.8 million in the fourth quarter of 2009 ($0.06 per common share). Specific items after-tax included restructuring costs of $10.1 million and bond exchange-related costs of $5.9 million, offset by a foreign exchange gain on long-term debt of $11.7 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter were negative $16.2 million, compared with positive EBITDA of $14.1 million in the preceding quarter. Before specific items, EBITDA deteriorated to negative $2.1 million from positive $15.5 million in the prior quarter. The Q1 operating loss of $48.9 million, compared to a $41.1 million loss in Q4, reflected lower EBITDA.
"We saw some recovery in print advertising from the very low levels of a year ago and as a consequence, paper demand is up slightly," said President and CEO Richard Garneau. "Pulp strengthened as various events combined to drive price recovery and we could see a more extended pulp up-cycle. Markets for all products going forward will be influenced by industry re-start decisions and operating rates."
Paper demand remained well below pre-recession levels, and benchmark prices dropped further for coated, uncoated and directory grades. North American newsprint consumption continued to decline, and although offshore exports helped boost the benchmark price over the preceding quarter, it remained well below the level of a year ago. Continued pulp price recovery was driven in part by production interruptions in Chile and other regions, and in late March the company announced it would restart the second pulp line at Crofton in the second quarter.