As was the case for most North American pulp and paper companies, it was a difficult quarter for Catalyst Paper. Ci…
As was the case for most North American pulp and paper companies, it was a difficult quarter for Catalyst Paper. Citing the "drag of the Canadian dollar," the company posted an $8 million loss, compared to earnings of $34.2 million for last year’s corresponding quarter. Costs associated with the name change from Norske Canada to Catalyst, compounded by higher legal and auditing costs also factored into the loss.
Despite the disappointing figures, the company remains upbeat and is focusing on the success of its performance improvement program, which enabled a $28 million reduction in costs for the quarter, totaling $84 million in improvements for the year. The savings imply a 5% surpassing of the $80 million in savings the company set as a target. "This is a tremendous program," said CEO Russell Horner of the initiative. "We were very successful in 2005 in terms of understanding our markets." Horner explained that resources directed towards research permitted the company to better understand shipping processes, which in turn led to lower freight costs for the company.
As indication of its positive outlook, Catalyst is planning to spend $100 million on capital expenditures in the upcoming year. "It does get tougher and tougher every year," Horner conceded. "But we’re confident that we’ll continue to deliver in 2006."
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