Domtar’s Results Impacted by Low Paper Volumes

SEATTLE (Scrap Monster): Domtar Corporation declared preliminary financial results for second quarter 2019. The results were impacted by low paper volumes and high maintenance expenses on account of prolonged outages.

The company reported net earnings of $18 million or $0.28 per share for Q2 2019. This compared with the net earnings of $43 million or $0.68 million per share during the similar quarter last year. The quarterly sales totaled $1.3 billion. The earnings before items dropped from $41 million to $36 million over the previous year. The operating income stood at $57 million.

Over the prior quarter, manufactured paper shipments dropped by 7%, whereas the pulp shipments were up by 6%. The paper and pulp inventories dropped by 15,000 metric tons and 2,000 metric tons respectively, in comparison with the first quarter of the current year. The company reported shipment-to-production ratio of 98%.

Domtar Corporation expects improvement in paper volumes and stability in paper prices for the remainder of 2019. It foresees volatility in softwood and fluff pulp markets and moderate inflation in costs in H2 this year.

Commenting on the results, John D. Williams, President and Chief Executive Officer stated that Paper business fell short of expectations, mainly due to higher import sand customer destocking. The Pulp segment also witnessed downward price adjustments in several regions. The increased level of outages impacted productivity of both Pulp and Paper segments, he added.