Fortress Paper’s dissolving pulp segment has a better quarter
August 11, 2015 By Pulp & Paper Canada
Fortress Paper Ltd. reported 2015 second quarter EBITDA of $4.1 million, an increase of $6.6 million over the previous quarter and $10.1 million over the prior year. The dissolving pulp segment generated EBITDA of $2.1 million, making a positive EBITDA contribution to the company for first time. Fortress’ security paper products segment generated EBITDA of $3.4 million.
The positive EBITDA of $2.1 million for the dissolving pulp segment for the quarter ended June 30, 2015, was an improvement of $5.4 million when compared to the first quarter of 2015 EBITDA loss of $3.3 million. The operational challenges in the chemical preparation area and limited capacity of the turbine experienced during the fourth quarter of 2014 impacted the results of the first quarter of 2015. The results for this most recent quarter benefitted from improved productivity and cash production cost over the prior quarter, as well as increased power generation for Hydro Quebec, and improved pricing. The cogeneration facility generated $5.5 million in sales revenue from the generation of power in the second quarter compared to $3.4 million in the first quarter of 2015
Fortress reports that production costs averaged $816 per ADMT of dissolving pulp in the second quarter. The company sold 39,664 air dried metric tonnes (ADMT) of dissolving pulp in the second quarter of 2015 compared to 38,957 ADMT of dissolving pulp the previous quarter. Sales totaled $39.9 million for the quarter compared to $37.0 million for the first quarter of 2015. The dissolving pulp segment continues to be affected by the anti-dumping duty imposed by China’s Ministry of Commerce in April 2014, but Fortress is diversifying its geographic sales mix and intends to further reduce its dissolving pulp shipments to China by approximately 20% over the balance of the year.
Fortress reports that the Landqart security papers mill continues to implement new initiatives to improve efficiencies and profitability
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