Domtar's losses improve
Domtar Corp., the Montreal-based paper company that intends to close its Baileyville mill this month, today reported a net loss of $45 million for the first quarter of 2009 compared to a net loss of $676 million for the fourth quarter of 2008. Sales for the first quarter of 2009 amounted to $1.3 billion, according to its preliminary first quarter report.
"We continue to face a very hostile environment in pulp with prices reaching cyclical lows. To bring our system back in balance we have announced the indefinite closure of our Woodland pulp mill and idled our Dryden pulp mill for 10 weeks," said John D. Williams, president and CEO. "Our people have responded remarkably well to the mandate of right-sizing the organization, improving its operating performance and reducing procurement costs and discretionary spending. We have generated free cash flow and our paper inventories have been significantly reduced despite a very weak demand environment."
The indefinite closure of the Woodland pulp mill in Baileyville is expected to help lower inventories and contribute to reducing fixed costs starting in the second quarter, according to the report. The company was also helped by an alternative fuel tax credit of $46 million in the first quarter of 2009.
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