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Domtar paper rolls
Domtar paper rolls

Domtar boosts quarterly dividend Add to ...

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.

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  • Updated July 26 4:00 PM EDT. Delayed by at least 15 minutes.

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