Catalyst Paper Cuts Loss Despite Weak Markets
RICHMOND, BC—May 6, 2013—Catalyst Paper posted a net loss of $9.8 million ($0.89 per common share) in the first quarter of 2013. The loss was $11.6 million before specific items. Improvement over the final quarter of 2012—when the company recorded a loss of $35.2 million ($1.55 per common share) and $15.7 million before specific items—was driven by increased prices for pulp, and lower maintenance costs.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the first quarter were $11.2 million, up from $7.2 million in the final quarter of 2012. Adjusted EBITDA was not impacted by restructuring costs in either quarter.
"The Chinese economic rebound has driven pulp shipments and prices up," said Catalyst President and CEO Kevin J. Clarke. "But we had much tougher conditions on the paper side of the business, with a 10 percent drop in North American demand for newsprint and a 15 percent decrease in directory paper. Labour costs also tipped up due to unforeseen maintenance requirements. The fact that we improved EBITDA indicates how much better positioned we are after last year's restructuring."
Catalyst listed new shares on the Toronto Stock Exchange on January 7, 2013 under the symbol CYT. A small shareholder selling program began on that date and ended on February 28.
Net income in the quarter was boosted by the completion of two asset sales. The court-approved sale of Snowflake mill assets and shares of the Apache Railway closed on January 30 for US$13.5 million and other non-monetary consideration. Sale of Catalyst's 50 percent interest in Powell River Energy (PREI) completed on March 20 for $33.0 million. Catalyst continues to purchase electricity generated by PREI.
Approximately $12.7 million of net proceeds from the PREI sale were distributed to unsecured creditors who elected cash rather than shares in settlement of their claims. These were the last outstanding creditor claims under the plan of arrangement through which Catalyst exited creditor protection in 2012.