Tembec reports financial results for its third quarter
July 31, 2009 By Pulp & Paper Canada
Tembec reports consolidated sales for the three-month period ended June 27, 2009 were $407 million, down from …
Tembec reports consolidated sales for the three-month period ended June 27, 2009 were $407 million, down from $609 million in the comparable period of the prior year. The company generated a net loss of $38 million in the June 2009 quarter compared to a net loss of $27 million in the June 2008 quarter. EBITDA was negative $42 million for the three-month period ended June 27, 2009, as compared to EBITDA of $9 million a year ago and negative EBITDA of $63 million in the prior quarter.
The pulp segment generated negative EBITDA of $22 million on sales of $239 million for the quarter ended June 2009 compared to negative EBITDA of $51 million on sales of $223 million in the prior quarter. Sales increased by $16 million primarily as a result of higher volumes partly offset by lower selling prices.
Pulp demand remained weak and the company incurred 86,200 tonnes of market related downtime and 1,400 tonnes of maintenance downtime. This compares to 182,600 tonnes of market downtime and 1,300 tonnes of maintenance downtime in the prior quarter. While market downtime remained significant, it was substantially lower than the record amount taken in the prior quarter.
The paper segment generated nil EBITDA on sales of $109 million. This compares to EBITDA of $19 million on sales of $124 million in the prior quarter. The $15 million decline in sales was driven by lower newsprint prices.
The company incurred 58,400 tonnes of market related downtime in the June 2009 quarter compared to 36,800 tonnes of market related downtime in the prior quarter. One of the three newsprint machines at the Kapuskasing newsprint mill was idle for the entire June 2009 quarter and the other two newsprint machines were idle for six weeks. The Pine Falls newsprint mill was idled for 10 days. The Temiscaming bleached board mill was also idle for 10 days during the most recent quarter.
Looking ahead, the company expects the economic downturn will continue to put pressure on prices and demand. Significant production curtailments will be required to see an improvement in newsprint pricing.
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