Magazine article Editor & Publisher

Losses on Paper

Magazine article Editor & Publisher

Losses on Paper

Article excerpt

Lower selling prices and a litigation settlement (see above) contributed to $88 million (Canadian) in second-quarter net losses on just under C$1 billion in net sales for Montreal-based Abitibi-Consolidated. Net loss from continuing operations, before restructuring and unusual expenses came to C$35 million.

Throughout the first half of 1999, the world's biggest newsprint producer permanently shut down 215,000 tons of capacity and cut sales, general, and administrative expenses by 14% compared with the same period in 1998.

Abitibi arranged in the United States for an offering of US$250 million of 8.5% debentures due Aug. 1, 2029, of Abitibi-Consolidated Inc. and of the same aggregate amount of 7.875% 10-year notes of Abitibi-Consolidated Finance lp, unconditionally guaranteed by Abitibi-Consolidated Inc. Net proceeds will be used to repay debt incurred to acquire the company's Snowflake, Ariz., mill, to partly fund investment in its Asia-Pacific joint venture, and to reduce outstanding bank debt.

For the quarter ended June 30, Alliance Forest Products, Montreal, reported a net loss of C$11.4 million on net sales of C$257.2 million, compared with net earnings of C$2 million on net sales of C$265.7 million in the same quarter last year.

Alliance President Pierre Monahan credited 'a dynamic lumber market' with partially offsetting the lowest newsprint prices in five years. Construction of the company's Donnacona mill's No. 4 paper machine is on schedule and within budget.

No. 2 North American newsprint maker Bowater, Greenville, S.C., had second-quarter net income of US$5.2 million. Excluding an asset write- down and gains on the sale of timberlands and on foreign exchange, Bowater, too, shows a quarterly net loss $16.5 million, in contrast to net income of $18.9 million in the second quarter of 1998. …

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