* Sees earnings pressed by rising fibre costs
* Keeps 2010 capex at C$20 mln
* Shares fall as much as 13 pct
(Adds conference call details, stock movement)
July 30 (BestGrowthStock) – Canadian paper maker Catalyst Paper
(CTL.TO: ) posted a wider-than-expected quarterly loss, hurt by
impairment charges and closure costs, and said it expects pulp
prices to soften in the third quarter, sending its shares down
as much as 13 percent.
Pulp prices, which have risen nearly 20 percent from
January 2009 levels, are expected to be weak over the next
three to six months as consumption levels fall in China.
In terms of the orders booked, the company expects specialty
paper volumes to be flat or slightly up sequentially in the
third quarter.
Catalyst Paper, which has five mills in British Columbia
and Arizona, said it expects cash flows and net earnings to
remain under pressure as fibre and other inputs costs rise.
Shares of the company were down 6 percent at 14.5 Canadian
cents Friday afternoon on the Toronto Stock Exchange. They
touched a low of 13.5 Canadian cents earlier in the day.
Earlier this month, the company, which caters to retailers,
publishers and commercial printers in North America, Latin
America and Europe, said it would close its Elk Falls paper
mill and paper recycling operations in Coquitlam.
[ID:nSGE6650J9]
“With the permanent closure of two facilities, the company
will reduce capacity curtailments, but necessary write-offs
have further highlighted imbalances in the capital structure,”
analyst Paul Quinn of RBC Capital Markets said in a note to
clients.
The company said it expects to save at least C$13 million
on an annualized basis in 2011, from the closures.
For the second quarter, the company posted net loss of
C$368.4 million, or 96 Canadian cents per share, compared with
net loss of C$1.9 million, or 1 Canadian cent a share, a year
earlier.
The latest quarter results were hurt by impairment charges
and closure costs of C$302 million, the company said.
Excluding items, Catalyst posted a loss of 11 Canadian
cents a share, while analysts on average polled by Thomson
Reuters I/B/E/S were expecting a loss of 7 Canadian cents a
share.
Sales fell to C$299.4 million from C$300.7 million last
year.
Stock Market Report
(Reporting by Koustav Samanta and Isheeta Sanghi in Bangalore;
Editing by Vinu Pilakkott and Don Sebastian)
UPDATE 1-Catalyst Paper sees weak pulp prices in Q3; shares fall
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