Catalyst improves operating results for Q3
By Cindy Macdonald
Catalyst Paper reported significantly improved operating results for the quarter ended September 30, aided by a cost-reduction program that has save $63.1 million so far this year.
The company reported adjusted EBITDA of $31.9 million and adjusted EBITDA before specific items was $35.3 million in the third quarter. This compares to adjusted EBITDA of negative $5.3 million and adjusted EBITDA before specific items of negative $1.1 million in the previous quarter.
Other significant specific items in the quarter included $3.1 million in professional fees and duties related to the countervailing duty on exports to the United States of supercalendered paper. The United States Department of Commerce is expected to deliver the preliminary results of its expedited review of Canadian imports of supercalendered (SC) paper to the U.S. on November 17.
“We improved our operating financial performance,” said Joe Nemeth, president and CEO. “The improvement in performance includes step change cost reduction while simultaneously growing the top line to provide Catalyst sustainable earnings levels.”
The company delivered significant third quarter savings through its Opportunities for Improvement (OFI) Program, with $63.1 million achieved year-to-date. Revitalization, cost management, product mix optimization and supply chain initiatives are key components of the OFI Program.
Maintenance spending in the quarter included a power boiler shutdown at the Rumford mill.
A non-cash impairment write-down of $186.4 million on fixed assets at its Powell River, Port Alberni and Crofton paper mills resulted in a $185.0 million net loss in the quarter.
Excluding the non-cash impairment write-down and other significant items in the quarter, Catalyst reported net earnings before these items of $7.6 million. This compared to a net loss of $26.6 million and a net loss before specific items of $27.3 million in the previous quarter.
A company statement announcing the Q3 results reads: “We maintain our focus on those things within our control, including striving to deliver top quartile operational performance in the areas of safety, productivity and cost management, while growing the top line through product mix improvements and higher-value specialty paper growth.”