AbitibiBowater Inc. today reported net income for the second quarter of 2011 of US$61 million on sales of US$1.2 billion. These results compare with a net loss of US$297 million on sales of US$1.2 billion for the second quarter of 2010.
AbitibiBowater Inc. today reported net income for the second quarter of 2011 of US$61 million on sales of US$1.2 billion. These results compare with a net loss of US$297 million on sales of US$1.2 billion for the second quarter of 2010.
“Our pricing for our pulp and paper products improved in the second quarter, and we completed our major annual maintenance at all our kraft pulp facilities,” said Richard Garneau, president and CEO. “Although overall economic indicators are weak, I believe our focus on cost and debt reduction should yield improved financial results in the second half of the year.”
The newsprint segment had operating income of US$26 million for the second quarter of 2011, an increase of US$7 million from the first quarter operating income of US$19 million. The company’s average transaction price increased US$9/tonne compared to the first quarter of 2011. Average operating costs were equivalent to the first quarter, primarily as a result of a US$9 million energy benefit that was booked in the quarter relating to prior quarters for the implementation of an Ontario power program, offset by a stronger Canadian dollar and higher recycled fibre costs.
Total newsprint shipments were 41,000 tonnes higher in the second quarter compared to the first quarter. The downtime and roof damage that occurred in February at the Clermont, Que., facility reduced production by approximately 31,000 tonnes during the quarter. The machine restarted in June and is performing well.
Operating income for coated papers for the second quarter was $23 million compared to operating income of US$3 million in the first quarter.
For the second quarter, the specialty papers segment had operating income of US$11 million compared to breakeven in the first quarter. The company’s average transaction price increased US$26 per short ton, however AbitibiBowater curtailed 26,000 tons of production due to weak demand.
Operating income for market pulp was US$14 million in the second quarter of 2011 compared to operating income of US$23 million in the first quarter. The average market pulp transaction price increased US$32 from the first quarter. Average operating costs increased US$64/tonne compared to the first quarter as a result of kraft mill maintenance outages at the Thunder Bay, Calhoun and Coosa Pines facilities and the stronger Canadian dollar, partially offset by a US$2 million energy benefit.
“We remain cautious about the economy and the impact it could have on advertising and, in turn, paper demand,” said Garneau. “We expect pulp pricing to be weaker but still expect pricing to stabilize later in the year.”
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