AbitibiBowater, North America's Largest Newsprint Producer, Posts Higher Profits
MONTREAL - AbitibiBowater Inc. (TSX:ABH) said Wednesday its second-quarter profits rose to $61 million, reversing a loss in the same period last year when it was involved in a court-supervised restructuring.
The forestry products company said the results were equal to 63 cents per share. That compares to a loss of $297 million a year ago, or $5.15 per share.
Sales were $1.2 billion, up slightly from $1.18 billion.
President and CEO Richard Garneau said the improvement was driven by a rise in the prices of pulp and paper during the second quarter.
"Although overall economic indicators are weak, I believe our focus on cost and debt reduction should yield improved financial results in the second half of the year," he said in a release.
AbitibiBowater also completed its annual major maintenance program for all its facilities in kraft pulp.
The company is marking a turnaround after emerging from creditor protection following 20 months of court-supervised restructuring.
AbitibiBowater, which is seeking a new corporate name and headquarters, said it plans to hold onto its Quebec hydro assets but will push to reduce the investments it is legally required to make in the facilities.
It recently sold its 75 per cent interest ACH Ltd., which holds its hydro assets in Ontario for $300 million.
Since being created in a merger in 2007, AbitibiBowater has closed 3.4 million tonnes of paper capacity, removed 900 million board feet of lumber production capacity and cut its employee base by 38 per cent to 11,000, including 7,200 in Quebec.
Through the restructuring process, workers agreed to $95 million of wage and benefit concessions.
AbitibiBowater is North America's largest newsprint producer with about 37 per cent of the market. It has been trying to adjust to lower demand for that type of paper, primarily used for newspapers, caused in part by the digital revolution.
Exports to growth markets in Asia, South America, the Middle East and other areas now account for nearly half of AbitibiBowater's production.