Positive quarter for abitibi sparks hope
August 1, 2006 By Pulp & Paper Canada
A positive quarter has translated to hope for the union representing mill workers in Grand Falls-Windsor, the CBC r…
A positive quarter has translated to hope for the union representing mill workers in Grand Falls-Windsor, the CBC reported.
Abitibi-Consolidated posted a second-quarter profit of $157 million, compared to a loss of $43 million in the corresponding quarter of 2005.
Now, Ron Smith of the Communications, Energy and Paperworkers’ union says he is hopeful that the positive results will prompt the company to keep both papermachines at the Grand Falls-Windsor mill up and running, safeguarding many jobs in the process.
However, as the CBC further reported Stephen Atkinson of BMO Capital Markets as saying, Abitibi’s profits can be primarily accounted for by the result of new federal income tax rates and a robust Canadian dollar, and are not necessarily a reflection of a turnaround.
The CBC confirmed Atkinson as warning that the company is ‘not apt to invest any of the quarterly profit in the mill in Grand Falls-Windsor,’ and that using the money to pay down part of its $3.7 billion debt is more likely.
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