AbitibiBowater, doing business as Resolute Forest Products, saw operating loss at its wood products segment double, from the same period a year ago, to $6 million for the first quarter, the company announced today.
Overall, net income at the Montreal-based pulp, paper, and lumber manufacturer fell 23% to $23 million for the period ended March 31. Sales at the company, which reports its earnings in U.S. dollars, also fell 12% to $1.05 billion. Operating income for the quarter slipped 4% to $26 million even though costs of sales declined 10% to $836 million.
Sales in the wood products unit dipped 4% to $111 million. The manufacturer shipped 367 million board feet of lumber during the quarter, a 2% decline from the same time last year and an 8% slide from the previous quarter.
EBITDA by reportable segment, which Resolute Forest Products defines as net income (loss) from its consolidated statements of operations, allocated to our reportable segments (newsprint, coated papers, specialty papers, market pulp and wood products) in accordance with FASB ASC 290, "Segment Reporting," adjusted by depreciation, amortization and cost of timber harvested, was $3 million for the lumber unit, a 25% decrease from last year.
Overall, Resolute Forest Products’ EBITDA fell 5% to $96 million as Adjusted EBITDA plunged 28% to $71 million. The results were affected by the company’s pulp unit’s slide into the red with a $21 million operating loss, a huge swing from the $23 million in operating income it posted a year ago.
"Our balance sheet continued to strengthen despite seasonal softness and market headwinds," said Richard Garneau, president and CEO. He said the lumber markets have also begun to reflect the gradual rise of U.S. housing starts.