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PricewaterhouseCoopers: Forest companies have strong third quarter

Canadian forest products companies and paper producers recorded strong results and a solid performance for the third quarter of 2010 amid ongoing market uncertainty, Pricewaterhouse Coopers reports.

Canadian forest products companies and paper producers recorded strong results and a solid performance for the third quarter of 2010 amid ongoing market uncertainty, Pricewaterhouse Coopers reports.

In its latest report on the forest products and pulp and paper sectors, PwC says markets for pulp remained favorable during the quarter in spite of downward pressure exerted by the addition of idled capacity and reduced demand from China. Prices for NBSK pulp remained at near-record levels and averaged just over $1000 per tonne compared with $840 per tonne in the same quarter in 2009. Producers were faced with higher fibre costs during the quarter, but benefited from increased and record production levels, PwC states.

Among pulp and paper producers in West, Mercer shows significant improvement, with net earnings of $62 million in Q3 2010, compared with loss of $22 million in Q3 2009. West Fraser bounces back with earnings of $45 million this year, compared with loss of $199 million in Q3 last year. Canfor also shows growth, while Catalyst Paper’s fortunes have declined, with net earnings of only $6 million in Q3 2010, compared with $13 million the same time last year.

In the East, Domtar is down slightly compared with year-earlier figures, to $199 million for Q3 2010. Cascades is down slightly as well, at $30 million for Q3 2010. Tembec shows earnings growth to $2 million compared with a loss of $17 million one year earlier. And AbitibiBowater, still operating under creditor protection, recorded a loss of $637 million in Q3 2010, almost $300 million more than its year-earlier figure.