Resolute Forest Products Turn In a Solid Year Despite Challenging Market

SEATTLE (Scrap Monster): The pulp and paper leader, Resolute Forest Products, Inc. has announced its preliminary fourth quarter and the full year 2017 results. The company reported total sales of $898 million during the quarter ended December 31, 2017. The sales for the entire year 2017 dropped slightly by 1% to total $3.5 billion. For the quarterly period, the company reported net income of $13 million. However, for the full year, the company reported net loss of $84 million, as compared with the net loss of $81 million in 2016. It must be noted that the company had reported net income of $24 million in Q3 '17.

According to Richard Garneau, president and chief executive officer, the company’s quarterly results were impacted by the ongoing restructuring operations at Calhoun paper plant as well as the maintenance outages at several of its locations. The company’s market pulp, tissue and wood products segments reported profits, whereas the newsprint and specialty paper segments delivered subdued performance, Garneau said. The sector, in general, has been hit by the softwood lumber trade war between the US and Canada.

The market pulp segment generated an operating income of $79 million in 2017, as compared with $37 million in 2016. The stronger demand for all grades resulted in 6% surge in average transaction price. The shipments too were up by nearly 3%. The segment reported an operating income of $37 million during the quarter.

The operating results of the tissue segment improved by $1 million when matched with the prior quarter. The inventories increased sharply from 3,000 short tons to 13,000 short tons. The delivered costs remained essentially unchanged despite elevated manufacturing costs on account of Hurricane Irma. For the full year 217, the segment reported operating loss of $6 million, as compared with an operating loss of $10 million in 2016.

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The operating income from wood products segment during the quarter and 2017 totaled $57 million and $186 million respectively. The EBITDA for the segment more than doubled from $100 million in 2016 to $219 million in 2017. The newsprint segment incurred operating loss of $6 million during the quarter, thus taking the full-year loss to $23 million in 2017. The full-year shipments have declined considerably by 18%.

The specialty papers segment reported operating loss of $13 million in Q4 ’17 as against income of $19 million in Q3. In 2017, the segment recorded operating loss of $9 million, as compared with an operating income of $19 million in 2016.