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Generally weaker earnings for Q4 2012 among forest products firms

Canada’s forest and paper products companies reported generally weaker net earnings for the fourth quarter of 2012, compared to the third quarter of 2012, according to PwC’s Global Forest and Paper Industry Net Earnings Summary. Log, lumber and…

Canada’s forest and paper products companies reported generally weaker net earnings for the fourth quarter of 2012, compared to the third quarter of 2012, according to PwC’s Global Forest and Paper Industry Net Earnings Summary. Log, lumber and panel prices continued to show strength throughout the quarter mirroring the improvement in U.S. housing starts. Pulp and paper prices dropped in the quarter, but prices rebounded somewhat by year end and were expected to remain flat through the first quarter of 2013. The ten largest forest products companies based in Western Canadian posted aggregate net earnings of $1.2 million compared with $775.1 million in the third quarter of 2012, and net losses of $759.5 million in Q4 2011. Diversified companies Canfor and West Fraser delivered strong Q4 2012 results, posting net earnings of $24.6 million and $22.0 million respectively. Catalyst Paper Corporation reported net losses of $36.7 million for the quarter. Although Catalyst successfully made the transition out of creditor protection in the third quarter of 2012, the company’s underlying business is exposed to declining demand for newsprint and pulp.

The five largest Eastern Canadian based companies tracked in PwC’s summary posted net losses of $37.4 million in the fourth quarter, compared to net earnings of $14.7 million for the third quarter of 2012 and net losses of $58.5 million in Q4 of 2011. Resolute Forest Products reported net losses of $34.7 million compared with net earnings of $30.9 million for the third quarter, related to weak newsprint and paper prices during the quarter.

Ten of the largest US-based forest and paper companies reported net earnings of US$922.7 million for the fourth quarter of 2012, down slightly from US$1.2 billion in the third quarter of 2012 and US$1.2 billion in the fourth quarter of 2011.
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