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RICHMOND, B.C. - The appreciation of the Canadian dollar and weak paper markets continued to weigh on Catalyst Paper (TSX:CTL) in the third quarter, dropping the pulp and paper producer to $19.8-million loss, excluding a one-time gain.
Catalyst, based in Richmond, B.C., reported Tuesday net earnings of $13.2 million in the quarter, three cents per share, including a $33-million gain related to translation of long-term U.S.-dollar denominated debt. That compared with a year-ago loss of $10.9 million or three cents per share.
Stripping out one-time items, Catalyst reported a year-ago third-quarter profit of $7.2 million.
Sales in the third quarter fell to $263.4 million from $504.8 million in the prior-year period as "market conditions generally remained weak across all paper grades, due to the slowdown in retail advertising and declining demand for newsprint," the company said in a statement.
"With the exception of pulp, the best that can be said about third-quarter markets is that demand decline has slowed down," said president and CEO Richard Garneau.
"Looking to the fourth quarter and into 2010, we expect results to come under heavy pressure due to the continued weak markets, uncertainty in pricing recovery, and the negative impact of an escalating Canadian dollar."
Production curtailments during the quarter represented about 42 per cent of the company's total capacity.
Catalyst makes specialty printing papers, newsprint and pulp. It has six mills in B.C. and Arizona with a combined annual production capacity of 2.5 million tonnes. The company employed about 3,600 people at the end of last year.
Its shares were down 1.5 cents or six per cent at 23.5 cents in Tuesday trading on the Toronto Stock Exchange.
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