Canadian forest and paper products companies reported strong net earnings for the third quarter of 2012, with the solid wood, panel and diversified products companies posting generally better results than the pulp and paper producers, PwC reports.
In its net earnings summary for the quarter ended Sept. 30, 2012, PwC noted that lumber and panel prices were supported by the continued improvement in U.S. housing starts. Pulp prices declined through the quarter, but have likely bottomed, the report states.
Companies based in Western Canada posted net earnings of $775.1 million compared with net earnings of $28.4 million in the second quarter of 2012, and net losses of $234.8 million in the third quarter of 2011.
The most significant contributor to the Western Canada results was Catalyst Paper, which completed the final steps toward financial reorganization in the third quarter, and emerged from creditor protection. Catalyst’s Q3 results (net earnings of $688.4 million) were impacted by non-cash accounting adjustments, which included a one-time gain of $688.1 million from the restructuring process.
Eastern-Canadian companies posted net earnings of $14.8 million compared to net losses of $36.1 million for the second quarter of 2012, and net losses of $82.8 million in the third quarter of 2011.
Tembec reported net losses of $47.0 million in Q3 2012, due to the effect of lower pulp prices, a weak pulp market, a strong Canadian dollar and an impairment charge related to the company’s Chetwynd pulp mill, PwC reports.
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