Canadian Manufacturing

Domtar expects to post US$30-35M second quarter operating loss

Litigation settlement charge, closure and restructuring costs and property write-downs contributing



MONTREAL—Domtar Corp. is warning that it expects to post an operating loss of between US$30- and $35-million when it reports its second-quarter results later this month.

Domtar says that among things contributing to the loss are a litigation settlement charge of US$49-million, closure and restructuring costs of US$18-million and a charge of $5-million related to the impairment and write-down of property, plant and equipment.

The Montreal-based maker pulp and fibre-based products, including various papers and adult incontinence products, also faces depreciation and amortization charges of $93-million.

“We had sub-optimal pulp productivity and unusually high costs due to significant planned maintenance and delayed restarts in our pulp mills,” president and CEO John Williams said in a statement.

However, he said that by the end of the quarter the company had made “very good progress on addressing production issues” in the pulp and paper business.

“We remain confident that we will return to more normalized productivity levels across the business by the end of the third quarter,” he said.

Domtar will release its second quarter financial results before markets open on July 25.

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