Fortress Paper posts reduced Q4 loss, sees benefit from production efficiencies

VANCOUVER – Fortress Paper Ltd. (TSX:FTP) says it’s seeing some positive effect from efficiency improvements but continues to lose money amid anti-dumping duties imposed on some of its output by China, as well as operational challenges.

The Vancouver-based company’s net loss from continuing operations was $11.9 million, while its EBITDA loss excluding certain items was $1.4 million.

The results were an improvement from the fourth quarter of 2013, when Fortress had a net loss of $21.3 million and an EBITDA loss of $9.4 million.

Sales from continuing operations were $74.4 million, up from $37.2 million in the fourth quarter of 2014 but down from $80.4 million in the third quarter of 2014.

The Vancouver-based company said its dissolving pulp segment had a $3.7-million loss before interest, taxes and other items in the three months ended Dec. 31. That more than offset $3.2 million of earnings, before items, at its security paper products segment.

Dissolving pulp is used to make rayon, acetate textile fibres, cellophane, photographic film, medical surgery products, and tire cords among others. The market for dissolving pulp has been difficult since China imposed a duty on imports from Fortress and other producers.

“Although the dissolving pulp market conditions continue to be challenging, production efficiencies and cash costs continue to see improvements relative to the prior year comparative periods,” Fortress says.

Meanwhile, its other main segment — which makes products used in paper money — is facing pricing pressure from competitors and is feeling the impact of a strong Swiss franc.

Fortress said its Landqart mill in Switzerland is undertaking initiatives to improve efficiency and profitability.