Domtar Q2 posts net earnings of $40mn

25 Jul '14

3 min read

Domtar Corporation reported net earnings of $40 million ($0.61 per share) for the second quarter of 2014 compared to net earnings of $39 million ($0.60 per share) for the first quarter of 2014 and net loss of $46 million ($0.69 per share) for the second quarter of 2013. Sales for the second quarter of 2014 were $1,385 million.

Excluding items listed below, the Company had earnings before items of $40 million ($0.61 per share) for the second quarter of 2014 compared to earnings before items of $42 million ($0.65 per share) for the first quarter of 2014 and earnings before items of $16 million ($0.24 per share) for the second quarter of 2013.

Second quarter 2014 items:

-None

First quarter 2014 items:

-Closure and restructuring costs of $1 million ($1 million after tax); and

-Negative impact of purchase accounting of $3 million ($2 million after tax).

Second quarter 2013 items:

-Litigation settlement of $49 million ($46 million after tax);

-Closure and restructuring charges of $18 million ($13 million after tax); and

-Charge of $5 million ($3 million after tax) related to the impairment and write-down of property, plant and equipment.

Commenting on the second quarter results, John D. Williams, President and Chief Executive Officer, said, "While paper productivity improved from the first quarter, we took fifty-one thousand tons of lack of order downtime, which resulted in higher unit costs. Our pulp business benefited from good price momentum and we shipped over ten thousand tonnes from inventory. However, these benefits were more than offset by seasonally higher maintenance activity in our pulp mills."

Mr. Williams added, "In our Personal Care segment, results during the quarter were negatively impacted by higher raw material costs. Nevertheless, the integration of Indas is progressing well and it is performing in line with our expectations. In addition, our capacity expansion plan continues to ramp up and we are currently in the process of launching new products for strategic customers."

Quarterly Review

Operating income before items1 was $79 million in the second quarter of 2014 compared to an operating income before items1 of $83 million in the first quarter of 2014. Depreciation and amortization totaled $96 million in the second quarter of 2014.

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