Business
Aggregate Q3 09 losses of $632 million for Canadian forest and paper companies
Aggregate Q3 09 losses of $632 million for Canadian forest and paper companies
About this update from West Fraser Timber Co. Ltd.
[{"type":"text","content":"\n\n\n\nDec. 8, 2009 (Canada NewsWire Group) -- TORONTO, Dec. 8 /CNW/ -- Canadian forest and paper companies continued to face challenging business conditions in the third quarter of 2009 with sluggish demand and pricing for commodity products. Pulp prices gained upward momentum during the quarter but closed below prior year levels. According to the latest PricewaterhouseCoopers (PwC) quarterly net earnings review for the forest and paper industry in aggregate, losses of $632 million reported by Canadian companies in the third quarter of 2009 exceeded losses of $552 million reported in the same quarter of 2008.The nine largest public forest and paper companies in Western Canada posted losses of $210 million for the third quarter of 2009, compared to $230 million losses reported for the prior year period. Four of the nine companies posted positive earnings and seven companies reported improved results, however the improvement was mainly due to fluctuations in non-operating results.Western Canadian companies benefited from pre-tax foreign exchange gains of $164 million on the translation of US dollar denominated debt in the third quarter of 2009 compared to a loss of $87 million in the third quarter of 2008. Included in the results for West Fraser are asset impairment charges of $155 million.In Eastern Canada, the six largest public forest and paper companies reported losses of $422 million for the third quarter of 2009, a further decline from the $322 million losses for the comparable period of2008. Domtar and AbitibiBowater benefited from $266 million of alternative fuel tax credits available to their US kraft pulp mills. Also reflected in the 2009 third quarter results are $282 million of expenses recorded by AbitibiBowater related to asset impairments and reorganization items and $49 million recorded by Fraser Papers for impairment charges and reorganization costs.\"The third quarter financials for the sector are grim, adding to the tough times experienced over the last several years,\" said Craig Campbell, leader of PwC's Performance Improvement practice for the global forest and paper industry. \"Some hope is offered by the current positive price trend for pulp, which we believe will continue in 2010. And, while still relatively small in terms of volumes, there is some optimism in Western Canada about the growth of lumber ex...