News Financial Reports & Markets Paper Pulp
Domtar warns of expected operating loss ahead of Q4 2019 results

Domtar Corporation has warned of weaker financial performance than expected ahead of its fourth-quarter 2019 results, which will be released Feb. 7.

Domtar’s management expects fourth quarter 2019 sales to be $1.2 billion and the operating loss to be between $15 and $19 million. EBITDA before items is expected to be between $74 and $78 million.

“Our fourth quarter results fell short of expectations. We increased market-related downtime to better balance our supply with our customer demand and to accelerate our inventory reduction plan,” says John D. Williams, president and chief executive officer of Domtar.

“Our inventories are now at optimal levels and our expectation is that our business will return to a balanced level in early 2020 given recent capacity closures.”

The expected operating loss in the fourth quarter 2019 includes closure and restructuring costs of approximately $19 million and depreciation and amortization of $74 million. Adjusting the estimated operating loss for these two amounts yields EBITDA before items.

During the fourth quarter, Domtar repurchased 2.1 million shares for a total cost of approximately $75 million under its stock repurchase program.