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Resolute Forest Products reports results for the first quarter of the year

May 5, 2022  By P&PC Staff/Resolute Forest products

Resolute Forest Products reported its net income for the quarter ended March 31 of $210 million, or $2.68 per diluted share, compared to net income of $87 million, or $1.06 per diluted share, in the same period in 2021. Sales were $945 million in the quarter, an increase of $72 million from the year-ago period. Excluding special items, the company reported net income of $177 million, or $2.26 per diluted share, compared to net income of $119 million, or $1.45 per diluted share, in the first quarter of 2021.

Highlights from the report are as follows:

  • Q1 GAAP net income of $210 million / $2.68 per diluted share
  • Adjusted EBITDA of $270 million
  • Net debt at $140 million / liquidity at $1.1 billion at quarter-end
  • Acquisition of remaining 50 percent equity interest in Resolute-LP engineered wood partnership and Abitibi cogeneration facility
  • Achieved 30 percent GHG emissions reduction target compared to 2015 levels

“We further strengthened the balance sheet with significant cash generation and improved the competitiveness of our business with two tuck-in acquisitions,” said Remi G. Lalonde, president and chief executive officer. “Our earnings and cash position reflect favourable pricing momentum in all of our segments, but the transportation network improvements were slower than expected, which led to lower sales volume and higher inventory levels. With our strong balance sheet and liquidity well over $1 billion, we benefit from enhanced flexibility to generate long-term value for shareholders and to drive sustainable economic activity in the communities where we operate.”


He added: “I am also pleased to confirm we surpassed our 30 percent absolute greenhouse gas emissions (scope 1 and 2) reduction target, cutting them by 34 percent compared to 2015 levels.”

The company reported an operating income of $235 million in the quarter, compared to an operating loss of $101 million in the fourth quarter. The improvement reflects higher selling prices in all segments ($206 million) and the net favourable impact of the indefinite idling of pulp and paper operations at the Calhoun (Tennessee) mill ($7 million). This was partially offset by lower shipments as a result of logistics constraints ($29 million), as well as higher fibre ($25 million) and freight expenses ($8 million). The company recorded lower selling, general and administrative expenses ($7 million), mainly due to lower share-based compensation expenses in the quarter. The prior quarter results were unfavourably affected by charges related to the indefinite idling of pulp and paper operations at the Calhoun mill ($171 million).

Market Pulp

The market pulp segment recorded operating income of $22 million in the first quarter, $3 million higher than in the prior quarter. The average transaction price increased by $9 per metric ton, or one percent, and the delivered cost fell by $8 per metric ton. Shipments were 28,000 metric tons lower, due to the capacity curtailment at the Calhoun mill and logistics constraints, which resulted in an increase in finished goods inventory of 23,000 metric tons. EBITDA in the segment improved by $1 million, to $26 million.


The tissue segment incurred an operating loss of $9 million in the quarter, compared to an operating loss of $6 million in the fourth quarter. The average transaction price increased by $47 per short ton, or two percent, due to a better product mix, and shipments rose by 1,000 short tons. The delivered cost increased by $141 per short ton, or seven percent, mostly due to higher pulp prices, including the loss of pulp integration with the pulp capacity curtailment at the Calhoun mill. Finished goods inventory was unchanged at 6,000 short tons. EBITDA in the segment fell by $3 million, to a negative $4 million.


The paper segment recorded an operating income of $25 million in the quarter, an improvement of $29 million over the previous quarter. The average transaction price rose by $37 per metric ton, or five percent, due to favourable market conditions in all grades. Shipments slipped by 22,000 metric tons with the capacity curtailment at the Calhoun mill. The delivered cost decreased by $47 per metric ton, or six percent, due to lower overall operating costs following the curtailment in Calhoun, partly offset by higher freight costs. Finished goods inventory remained elevated at 85,000 metric tons, as a result of limited rail car and truck availability. Quarter-over-quarter segment EBITDA improved by $22 million, to $34 million.

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