The 2012 second quarter net earnings reports for the Canadian
forest and paper companies show a distinct quarter to quarter
change in fortunes between the Western and Eastern based companies.
The lumber and solid wood segment of the industry is experiencing
slow but steady improvements, based primarily on the gradually
improving US housing market. Northern Bleached Softwood Pulp (NSBK)
prices continued to decline from the record highs reached in Q2
Western Canadian based companies posted net earnings of $30.1
million compared with net losses of $39.5 million in the first
quarter of 2012 and net earnings of $6.8 million in the second
quarter of 2011. West Fraser reported the highest net earnings for
the quarter of $26.9 million compared to earnings of $16.7 million
in the first quarter. Catalyst Paper Corporation reported net
losses of $12.3 million for the quarter, an improvement from losses
of $25.8 million in Q1 of 2012 and losses of $47.7 million in Q2 of
2011. Catalyst Paper Corporation is currently restructuring its
financial affairs through the Companies' Creditors
Arrangement Act (CCAA).
Eastern Canadian based companies posted net losses of $58.3
million compared to net earnings of $31.2 million for the first
quarter of 2012 and net earnings of $185.2 million in the second
quarter of 2011. Cascades reported net earnings of $7.0 million for
the second quarter, while Resolute Forest Products reported a net
loss of $65.7 million compared to net earnings of $33.0 million in
the first quarter of 2012. Resolute recorded $88 million of closure
costs, impairment and other related charges related to the
indefinite idling of the company's Mersey newsprint
Ten of the largest US-based forest and paper companies reported
net earnings of US $1.1 billion for the second quarter of 2012,
down from US $905.4 million in the second quarter of 2012 and US
$899.9 million in the second quarter of 2011. Kimberly-Clark
reported another strong quarter with net income of US $518.0
million, up from US $487.0 million in the first quarter of 2012. As
a producer of tissue products, Kimberly-Clark sources all their
pulp from external suppliers. Gross margins were positively
influenced by the decrease in the price of pulp in the second
Ten of the largest European based forest and paper companies
reported overall earnings of €482.6 million for the first
quarter of 2012, up from earnings of €477.7 million in the
first quarter of 2012, but down from earnings of €696.1
million in the second quarter of 2011. Earnings in the second
quarter have been affected by the debt crisis in Europe and weak
demand for newsprint and magazine paper in Europe and
Rest of the World: Japan and Emerging Markets
Five of the largest forest and paper companies in Japan posted
net earnings of US $241.3 million in the second quarter of 2012, up
from US $123.6 million in the first quarter of 2012 but down from
net earnings of US $273.0 million in the same period of 2011. The
Japanese forest and paper industry continues to slowly improve from
the disruption to operations from the March 2011 earthquake and
Four of the largest forest and paper companies in emerging
markets reported net losses of US $271.2 million in the second
quarter of 2012, compared to net earnings of US $228.8 million in
the first quarter of 2012 and US $424.5 million in the second
quarter of 2011. Fibria Celulose reported net losses of US $267.3
million for the quarter, partially due to the effect of US dollar
appreciation against the Brazilian Real on Fibria's US
dollar denominated debt. Fibria's free cash flow generation
was positive US $30.1 million for the quarter.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In our January Employee and Labour Relations bulletin, we reported important amendments to the Criminal Code of Canada that will significantly impact all Canadian workplaces.
Bill C-45, also known as the Westray Bill in honour of the deadly explosion at the Westray mine in Plymouth, Nova Scotia in 1992 that prompted legislators to review occupational health and safety law, comes into force on March 31, 2004.
Technology startups need to know how to raise capital, protect their inventions, access government technology support programs, develop commercialization strategies, and navigate federal and provincial legislation and regulations.