PwC’s Global Forest and Paper Industry report showed Western Canadian forest and paper products companies posted net losses of $234.2 million in 2011’s third quarter.
That’s a significant decrease from the $178.8 million profit in 2010’s third quarter.
The largest decrease from Q3 2010 was for Catalyst Paper Corp., which reported a net quarterly loss of $205.7 million, compared with net profits of $5.6 million for the same period last year. The loss includes impairment costs of $150.6 million related to its Arizona-based Snowflake Mill.
Nationally, the majority of forestry and paper products reported lower earnings for this year’s third quarter than in Q3 2010, including those in Eastern Canada.
Lower pulp prices, weak lumber demand and a strong Canadian dollar were all factors in the decreased earnings.
The lumber and solid wood segments of the industry were negatively affected by the U.S. economy, housing market and decreasing demand from China.
Northern bleached softwood kraft pulp prices were not as affected and remained strong, having realized record highs earlier this year.
One exception was North Ontario’s AbitibiBowater. The company reported net losses of $41.2 million in the third quarter, compared with losses of $861.4 million in the same period in 2010 – the majority of which were attributed to restructuring.
Emma Crawford