Resolute Forest Products Net Income Soared to $24 Million in Q3 2017

The anticipated gains from restructuring measures are likely to result in solid cash flow generation in the short term.

SEATTLE (Scrap Monster): Resolute Forest Products Inc. (RPF) has reported solid performance during the third quarter of the current year. The robust quarterly show was mainly on account of improved results from market pulp and wood products segment. Meantime, sales during the quarter remained essentially unchanged.

According to company press release, RPF reported net income of $24 million or $0.26 per share for the quarterly period ending September 30, 2017. The income surged higher significantly when compared with the net income of $14 million or $0.15 per share during the corresponding quarter last year. Excluding special items, the company reported net income of $31 million or $0.34 per share. Meantime, the quarterly sales remained essentially flat over the previous year at $885 million. The company reported operating income of $48 million and an adjusted EBITDA of $118 million.

Richard Garneau, president and chief executive officer stated that the company has been able to build on the momentum established earlier in the year to deliver solid performance during the quarter. The market pulp and wood products segment continued to bring strong results. In addition, the company reported significant improvement in the cost position of its paper segment following capacity closures and restructuring of operations. The newsprint segment continued to incur operating loss during Q3 this year, Garneau noted.

The operating income surged higher by almost one-fifth quarter-on-quarter to total $19 million. The total shipments to third parties rose by 12,000 metric tons. Also, finished goods inventory reported jump of 6,000 metric tons. The wood products segment income surged by more than 42% over the previous quarter to $64 million for the third quarter of 2017. Also, the average transaction price rose to $413 per thousand board feet. The income from Specialty Papers segment too increased from the previous quarter.

The tissue segment operating loss increased despite steady volume of shipments. The loss was mainly due to facility damage and interruption in Florida operations in connection with Hurricane Irma. The newsprint segment loss narrowed from $7 million in Q2 this year to $6 million during Q3.

In its outlook, the company noted that the anticipated gains from restructuring measures are likely to result in solid cash flow generation in the short term. The market fundamentals for wood products will continue to remain favorable. However, it expects a turnaround from tissue segment only by mid-2018.

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