Solid quarter led by a strong performance in Pulp and Paper
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted).
• Third quarter 2017 net earnings of $1.11 per share
• Price increases announced for several pulp and paper grades
• $112 million of cash flow from operating activities
Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $70 million ($1.11 per share) for the third quarter of 2017 compared to net earnings of $38 million ($0.61 per share) for the second quarter of 2017 and net earnings of $59 million ($0.94 per share) for the third quarter of 2016. Sales for the third quarter of 2017 were $1.3 billion.
Excluding items listed below, the Company had earnings before items1 of $65 million ($1.03 per share) for the third quarter of 2017 compared to earnings before items1 of $38 million ($0.61 per share) for the second quarter of 2017 and earnings before items1 of $71 million ($1.13 per share) for the third quarter of 2016.
Third quarter 2017 items:
• Gain on disposal of property, plant & equipment of $4 million ($3 million after tax); and
• Partial reversal of contingent consideration related to an acquisition of $2 million ($2 million after tax).
Second quarter 2017 items:
• None.
Third quarter 2016 items:
• Impairment of property, plant & equipment of $5 million ($4 million after tax); and
• Closure and restructuring costs of $10 million ($8 million after tax).
QUARTERLY REVIEW
“We continue to generate strong EBITDA and cash flow in our Pulp and Paper business while taking further measures to optimize our assets and improve our manufacturing processes,” said John D. Williams, President and Chief Executive Officer. “Our mills ran well and productivity was strong, resulting in a good cost performance across our network. Our paper shipments improved seasonally while momentum continued in both volume and price in our pulp business.”
Commenting on Personal Care, Mr. Williams added, “Price pressure and raw material headwinds negatively impacted margins in the quarter but we achieved a 9% increase in infant diaper volumes, we are delivering cost savings and our sales pipeline remains strong. We continue to execute our strategies for long-term success, while focusing on near-term growth opportunities as we operate in a competitive environment.”
Operating income was $89 million in the third quarter of 2017 compared to operating income of $64 million in the second quarter of 2017. Depreciation and amortization totaled $80 million in the third quarter of 2017.
Operating income before items1 was $83 million in the third quarter of 2017 compared to an operating income before items1 of $64 million in the second quarter of 2017.
The increase in operating income in the third quarter of 2017 was the result of higher volume and average selling prices, favorable productivity, and lower maintenance and raw material costs. These factors were partially offset by unfavorable exchange rates and higher selling, general and administrative expenses.
When compared to the second quarter of 2017, manufactured paper shipments were up 3% and pulp shipments increased 11%. The shipments-to-production ratio for paper was 97% in the third quarter of 2017, compared to 98% in the second quarter of 2017. Paper inventories increased by 24,000 tons and pulp inventories increased by 32,000 metric tons when compared to the second quarter of 2017.
more detail at: http://www.domtar.com/en/investors/pressreleases/index.asp