North American pulp and paper giant Domtar Inc. is increasing its quarterly dividend by 40 per cent to 35 cents (U.S.) per share.
The Montreal-based company is also increasing its share repurchase program to $600-million from $150-million in 2009.
Domtar said it plans to return a majority of future free cash flow to shareholders until it finds the right investment opportunities.
The past year has been a strong one for the company as earnings before items increased 10-fold from 2009. Free cash flow also surpassed a record $1-billion.
It paid down $900-million of long-term debt, introduced a 25-cent quarterly dividend and repurchased $114-million shares.
A total of $146-million or 42 per cent was returned to shareholders.
Domtar said that return surpassed most of the forestry industry and the broader market.
Paper profit increased 6 per cent even though sales were flat and shipments declined 4 per cent.
Pulp sales increased 56 per cent due to higher average selling prices and an 8-per-cent increase in shipments.
Domtar is North America's largest producer of uncoated freesheet paper. It was 8,500 employees in the United States, Canada and overseas.Report Typo/Error
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