Resolute releases Q4 and year-end 2018 results
By P&PC Staff
By P&PC Staff
Feburary 1, 2019 – Resolute Forest Products has released its preliminary fourth-quarter and year-end 2018 results for the period ended December 31, 2018, reporting $932 million in sales, up $34 million from the year-ago period.
Net income was $36 million, or $0.38 per diluted share, compared to $13 million, or $0.14 per diluted share, in the same period in 2017.
For the year, the company reported GAAP net income of $235 million, or $2.52 per diluted share, compared to a net loss of $84 million, or $0.93 per share, in 2017. Sales were $3.8 billion, up seven per cent, from the previous year. Excluding special items, the company reported net income of $183 million, or $1.96 per diluted share, compared to $12 million, or $0.13 per diluted share, in 2017.
“With our optimized asset base, we were able to deliver strong annual performance with the positive market dynamics in the year, despite cost headwinds and a soft lumber market in the fourth quarter,” says Yves Laflamme, president and chief executive officer. “We experienced significantly weaker pricing for lumber in the quarter, unforeseen operational disruptions, planned maintenance, as well as higher energy and wood costs.
“Despite these challenges, we generated $435 million of cash from operations in 2018, monetized the Catawba and Fairmont assets at attractive valuations, returned $136 million of capital to shareholders through a special dividend and further reduced our leverage shortly after year-end. Our stronger balance sheet improves our financial strength and flexibility and positions us well for future growth opportunities.”
Operating income in the market pulp segment was $41 million, a reduction of $16 million when compared to the previous quarter. The average transaction price continued to rise across most grades, up a further $25 per metric ton this quarter to $809. Shipments decreased by 25,000 metric tons, mostly due to scheduled maintenance downtime, operational disruptions and the reduction in recycled pulp capacity following the sale of the Fairmont facility. The operating cost per unit (the “delivered cost”) rose by $59 to $688 per metric ton, due to production outages, as well as weather-related wood shortages in the U.S. Southeast, and an increase in energy costs. Consequently, EBITDA realized this quarter decreased to $46 million or, $136 per metric ton.
The tissue segment incurred an operating loss of $9 million in the quarter, relatively unchanged from the previous period, with EBITDA remaining at negative $5 million.
Read the full Resolute financial report for Q4 and year-end 2018.