Domtar points to pulp growth in Q1

P&PC Staff
May 03, 2017
By P&PC Staff
May 2, 2017 - Domtar Corporation on April 27 released preliminary results for its first quarter of 2017, pointing to good momentum in pulp markets. The company noted its pulp business is growing having shipped nearly 25 percent more tons when compared to the same quarter last year. When compared to the fourth quarter of 2016, pulp shipments increased nine per cent.

Domtar also pointed to a seasonally high level of scheduled maintenance negatively affecting its operating income in the first quarter of 2017, in addition to, lower average selling prices and higher raw material and other costs. Operating income was $42 million in the first quarter of 2017 compared to an operating income of $74 million in the fourth quarter of 2016.

Domtar reported net earnings of $20 million for the first quarter of 2017 compared to net earnings of $47 million for the fourth quarter of 2016 and net earnings of $4 million for the first quarter of 2016. Sales for the first quarter of 2017 were $1.3 billion.

“The Ashdown mill continued to focus its efforts on the production and quality of fluff pulp; we shipped primarily softwood bales in the quarter, but we are making good progress with the qualification of our grades and we’re receiving positive feedback from our customers,” said John D. Williams, President and Chief Executive Officer.

“Our pulp business is growing and becoming more meaningful,” Williams continued. “We’ve shipped nearly 25 percent more tons when compared to the same quarter last year, and current initiatives will support continued profitable growth. Our nearly two million tons of high-quality softwood, fluff and specialty market pulp capacity provides us with a scale business that will add momentum to our growth strategy for years to come.”

Williams explained Domtar’s Personal Care operations also saw strong sales growth and operational improvements in the first quarter continue to offset currency, price and cost challenges.

Cash flow from operating activities amounted to $91 million and capital expenditures were $34 million, resulting in free cash flow of $57 million for the first quarter of 2017.

Domtar has annual sales of approximately $5.1 billion and some 10,000 employees serving more than 50 countries around the world.

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