Welcome!

News Feed Item

Catalyst Paper Q2 results impacted by planned maintenance

RICHMOND, BC, July 29, 2014 /PRNewswire/ - Catalyst Paper (TSX:CYT) recorded adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of $7.1 million compared to $25.7 million in the previous quarter.  Strong operating performance was overshadowed by a planned maintenance outage at the Crofton pulp mill, higher power costs due to a hydroelectricity rate increase, a stronger Canadian dollar and lower transaction prices for pulp and all paper grades.  Sales of $283.5 million exceeded the prior quarter by $9.6 million and reflected higher paper sales due in part to the delivery of shipments delayed by the Q1 container truck driver strike at Port Metro Vancouver.

Catalyst recorded a net loss of $6.3 million ($0.43 per common share) and a net loss before specific items of $13.6 in Q2.  This compared to a net loss of $3.8 million ($0.26 per common share) and net earnings before specific items of $6.5 million the previous quarter.  Free cash flow for the quarter was negative $8.6 million.  Liquidity decreased $37.5 million from the prior quarter due to a lower borrowing base, debt redemption and buybacks in the quarter, the impact of the Crofton maintenance shut, and a scheduled interest payment.

Paper production volumes for the quarter were 3.5% higher than average production in 2013 and 2% higher than the first quarter of 2014 due to improved paper productivity.  Two major debottlenecking initiatives were completed on the pulp mill during the scheduled maintenance outage to increase future pulp production.

"Our operating results were hampered by the cost and production impact of the recovery boiler shut, the hydroelectricity rate increase, and the strengthening Canadian dollar," said Catalyst President and CEO Joe Nemeth.  "On the upside, we achieved a new record in paper productivity in the quarter, we're already seeing improved pulp production as a result of the debottlenecking work completed on the pulp mill, and our program to identify and implement opportunities for improvement is on track to realize significant benefits in 2014 and beyond."

Quarter Highlights

On July 24, 2014, the Ministry of Energy and Mines and BC Hydro introduced a new energy efficiency program that provides a three-year funding injection of $100 million, with $45 million allocated to Catalyst Paper.  The BC Hydro Power Smart program is aimed at reducing the energy intensity and improving the energy efficiency of thermal-mechanical pulping facilities in British Columbia.  The program will benefit Catalyst Paper's three mills located in Crofton, Port Alberni and Powell River by funding 75% of the required capital investment on projects that will improve the energy efficiency of these mills.  The first project at the Powell River mill is in the advanced stages of planning, has an expected cost of $25 million of which 75% will be covered by Power Smart funding, and will reduce the company's annual energy costs by approximately $5 million.

Catalyst redeemed the US$19.4 million outstanding balance on the Floating Rate Senior Secured Notes due 2016.  The company repurchased US$5.0 million of its PIK Toggle Senior Secured Notes due 2017 on the open market.

Market Conditions

North American demand decreased from the second quarter of 2013 for all paper grades except uncoated paper.  Benchmark prices for coated and uncoated paper declined from the previous quarter while remaining flat for directory and newsprint.  For NBSK pulp, the benchmark price decreased by 3.1% compared to Q1 due to short-term destocking in the quarter.

Selected Highlights

         
    2014   2013
(In millions of Canadian dollars, except
where otherwise stated)
  YTD   Q2 Q1   Total   Q4 Q3 Q2 Q1
Sales $ 557.4 $ 283.5 $ 273.9   $ 1,051.4   $ 272.1 $ 268.8 $ 263.4 $ 247.1
Operating earnings (loss)   10.9   (3.9)   14.8     (87.8)     (79.5)   4.9   (12.0)   (1.2)
Depreciation and amortization   21.9   11.0   10.9     47.0     11.7   11.5   11.4   12.4
Adjusted EBITDA 1   32.8   7.1   25.7     46.1     19.1   16.4   (0.6)   11.2
  - before restructuring costs 1   32.8   7.1   25.7     47.3     20.2   16.4   (0.5)   11.2
Net earnings (loss) attributable to the
company
  (10.1)   (6.3)   (3.8)     (127.6)     (95.0)   5.2   (28.0)   (9.8)
  - before specific items 1   (7.1)   (13.6)   6.5     (31.5)     1.7   (3.5)   (18.1)   (11.6)
Adjusted EBITDA margin1      5.9%      2.5%      9.4%          4.4%       7.0%     6.1%   (0.2%)       4.5%
  - before restructuring costs 1      5.9%      2.5%      9.4%          4.5%       7.4%     6.1%   (0.2%)       4.5%
Net earnings (loss) per share attributable to
the company's common shareholders
(in dollars)
                                   
  - basic and diluted from continuing
  operations
$ (0.70) $ (0.43) $ (0.26)   $ (9.01)   $ (6.55) $ 0.36 $ (1.93) $ (0.89)
  - basic and diluted from discontinued
  operations
  -   -   -     0.21     -   -   -   0.21
  - before specific items 1   (0.49)   (0.94)   0.45     (2.17)     0.12   (0.24)   (1.25)   (0.80)
(In thousands of tonnes)                                    
Sales   692.2   356.5   335.7     1,373.3     346.5   350.6   346.6   329.6
Production   702.5   349.7   352.8     1,382.6     350.2   357.6   338.5   336.3

1 Refer to section 6, Non-GAAP measures in Management's Discussion and Analysis (MD&A).

Outlook

The decline in demand for coated and uncoated mechanical paper is expected to continue for the remainder of the year.  Demand for directory paper will continue to decrease due to electronic substitution.  While newsprint demand is expected to continue to contract as circulation and page counts fall, the North American market is expected to remain stable due to pending newsprint machine conversions.

Global pulp inventories are very low and this may put upward pressure on future pulp pricing.  However, China's seasonally low demand and tight monetary policy are expected to negatively impact the softwood pulp market.  Pulp is therefore expected to trade in a narrow range for the balance of the year.

The Power Smart Program will result in improved energy efficiency and will partly mitigate the impact of energy cost rate increases.  Discussions will continue with key stakeholders on a suite of potential initiatives to further mitigate the impact of energy rate escalation.

Third quarter earnings will reflect a scheduled total mill outage at Powell River and power boiler shuts at all three mills.

Further Quarterly Results Materials
This release, along with the full annual Management Discussion & Analysis, Financial Statements and accompanying notes are available on our web site at www.catalystpaper.com/Investors.  This material is also filed with SEDAR in Canada and EDGAR in the United States.

Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp.  Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe.  With three mills, located in British Columbia, Catalyst has a combined annual production capacity of 1.5 million tonnes.  The company is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.

Forward-Looking Statement

Certain matters in this news release, including statements with respect to general economic and market conditions, demand for products, pricing expectations, anticipated cost savings and capital expenditures, are forward looking.  These forward-looking statements reflect management's current views and are based on certain assumptions including assumptions as to future economic conditions, demand for products, levels of advertising, product pricing, ability to achieve operating and labour cost reductions, currency fluctuations, production flexibility and related courses of action, as well as other factors management believes are appropriate.  Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in these statements, including those risks and uncertainties identified under the heading "Risks and Uncertainties" in Catalyst's management's discussion and analysis contained in Catalyst's annual report for the year ended December 31, 2013 available on the company's website at www.catalystpaper.com/investors and at www.sedar.com.

SOURCE Catalyst Paper Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Amazon started as an online bookseller 20 years ago. Since then, it has evolved into a technology juggernaut that has disrupted multiple markets and industries and touches many aspects of our lives. It is a relentless technology and business model innovator driving disruption throughout numerous ecosystems. Amazon’s AWS revenues alone are approaching $16B a year making it one of the largest IT companies in the world. With dominant offerings in Cloud, IoT, eCommerce, Big Data, AI, Digital Assista...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single threaded, you can effectively identify hot spots in your serverless code. In his session at 20th Cloud Expo, David Martin, Principal Product Owner at CA Technologies, will give a live demonstration and code walkthrough, showing how to ov...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
SYS-CON Events announced today that A&I Solutions has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 1999, A&I Solutions is a leading information technology (IT) software and services provider focusing on best-in-class enterprise solutions. By partnering with industry leaders in technology, A&I assures customers high performance levels across all IT environments including: mai...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
SYS-CON Events announced today that Outscale, a global pure play Infrastructure as a Service provider and strategic partner of Dassault Systèmes, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2010, Outscale simplifies infrastructure complexities and boosts the business agility of its customers. Outscale delivers a secure, reliable and industrial strength solution for its customers, which in...
In order to meet the rapidly changing demands of today’s customers, companies are continually forced to redefine their business strategies in order to meet these needs, stay relevant and continue to see profitable growth. IoT deployment and development is integral in this transformation, and today businesses are increasingly seeing the value of investing their resources into IoT deployments. These technologies are able increase ROI through projects such as connecting supply chains or enabling sm...
Every successful software product evolves from an idea to an enterprise system. Notably, the same way is passed by the product owner's company. In his session at 20th Cloud Expo, Oleg Lola, CEO of MobiDev, will provide a generalized overview of the evolution of a software product, the product owner, the needs that arise at various stages of this process, and the value brought by a software development partner to the product owner as a response to these needs.
SYS-CON Events announced today that EARP will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. "We are a software house, so we perfectly understand challenges that other software houses face in their projects. We can augment a team, that will work with the same standards and processes as our partners' internal teams. Our teams will deliver the same quality within the required time and budget just as our partn...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that Tappest will exhibit MooseFS at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. MooseFS is a breakthrough concept in the storage industry. It allows you to secure stored data with either duplication or erasure coding using any server. The newest – 4.0 version of the software enables users to maintain the redundancy level with even 50% less hard drive space required. The software func...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software in the hope of capturing value in IoT. Although IoT is relatively new in the market, it has already gone through many promotional terms such as IoE, IoX, SDX, Edge/Fog, Mist Compute, etc. Ultimately, irrespective of the name, it is about deriving value from independent software assets participating in an ecosystem as one comprehensive solution.
SYS-CON Events announced today that Systena America will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Systena Group has been in business for various software development and verification in Japan, US, ASEAN, and China by utilizing the knowledge we gained from all types of device development for various industries including smartphones (Android/iOS), wireless communication, security technology and IoT serv...