Shares of Catalyst Paper Corp. closed more than 13-per-cent lower Tuesday after the B.C.-based paper and pulp producer reported a loss of more than $200-million in the third quarter on a big asset writedown.
Catalyst stock dropped 1 cent to close at 6.5 cents – a drop of 13.3 per cent – on the TSX in trading of more than 2.3 million shares on the senior market.
After markets closed Monday, the company reported a net loss of $205.7-million or 54 cents per common share in the latest quarter, a figure that included a $151-million impairment charge on the Snowflake recycled newsprint mill in northeastern Arizona.
The loss in the most recent period compared with a net profit of $6-million or 2 cents per share in the same 2010 period.
Sales revenue rose to $340.3-million from $322.3-million.
“We regained momentum this quarter in productivity and operating rates,” president and CEO Kevin Clarke said in remarks accompanying the company's results.
“… Unfortunately, these improvements were overshadowed by the magnitude of the impairment charge at Snowflake, which makes very clear the relentless pressures on our industry.”
Before the impairment charge and other specific items, Catalyst had a net loss for the third quarter of $14.1-million or 4 cents per share.
The Snowflake impairment charge consists of a full writedown of the net book value of building, machinery and equipment, as well as the cost of materials and parts inventory.
“The profitability of recycled newsprint production at Snowflake is being severely impacted by demand declines and by supply and price pressures relating to recovered old newsprint which is the mill's sole fibre feedstock,” Catalyst said.
The company said continued weak print advertising resulted in another quarter of declining year-over-year demand for both coated and uncoated specialty grades of paper, although there was a “modest price improvement” for specialty grades and previously announced price increases were partially implemented.
Directory and newsprint demand were also down from the same quarter a year ago and the average North American benchmark price for newsprint was down slightly from the second quarter.
Catalyst, with four mills in British Columbia and Arizona, manufactures diverse specialty mechanical printing papers, newsprint and pulp. Customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe.Report Typo/Error
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