AbitibiBowater posted a third-quarter net loss of $44 million today, a huge improvement over the $829 million loss the company suffered during the same period a year ago, the company announced. Net sales remained flat at $1.2 billion.
Last year's third-quarter results were impacted by a $99 million interest expense as well as a $731 million reorganization item. There were no reorganization items and only a $19 million income expense during the latest quarter.
AbitibiBowater is a predominately U.S. pulp, paper, and wood products manufacturer, even though its headquarters are in Montreal. All the company's results are in U.S. dollars. On Oct. 11, the company announced it is changing its name to Resolute Forest Products during the fourth quarter.
The company's wood products segment reported a $3 million operating loss during the quarter, an increase of $2 million. Earnings before, interest, taxes, depreciation, and amortization (EBITDA) was $5 million, compared with $8 million a year ago. Since there were no special charges during the quarter, the segment's adjusted EBITDA, which the company uses as a performance indicator and defines as EBITDA adjusted for special items, remained at $5 million.
The average lumber transaction price increased $8 per thousand board feet during the quarter. Average costs decreased by $20 per thousand board feet, due mostly to lower manufacturing costs and a 5% increase in shipments. The company continues to idle 22% of its operating capacity.
Overall, the company announced EBITDA of $59 million, a huge swing into the black from the $606 million loss posted a year ago. Adjusted EBITDA increased 18% to $150 million.
Operating income during the third quarter was $72 million, compared with a $12 million operating income a year ago. The company also racked up $17 million in closure costs, impairment, and other related charges, while foreign currency translation loss jumped to $60 million.
"Our operating earnings improved for the third consecutive quarter following emergence at the end of last year," said president and CEO Richard Garneau. "Overall shipments increased and, with the exception of pulp, pricing in each of our segments was stable or better in the quarter. We continue to make progress in spite of an economy that continues to prove challenging."
During the quarter the company recorded long-lived asset impairment charges of $7 million relating to its Mokpo, South Korea, paper mill and $3 million related to scrapped equipment at its Calhoun, Tenn., paper mill.