Increased downtime, caused in part by a fire at Powell River mill, contributed to a net loss of about $47 million for Catalyst Paper Corporation in its second quarter.
The fire resulted in the number nine paper machine being down for five days and the number 10 machine down for 14 days.With extended maintenance downtime, this resulted in a loss of just over 20,000 tonnes of sold production and, along with a fire at the Snowflake mill in Arizona, cost the company $5.7 million in losses.
Temporary repairs still need permanent fixes. Associated costs will determine the company’s actions in terms of making an insurance claim.
A strong Canadian dollar and high fibre prices also contributed to the total loss of $47.4 million on sales of $297.8 million. The loss is up from $12.9 million in the first quarter on sales of $303.6 million.
Despite low numbers, Catalyst officials said the pulp industry was a bright spot in the quarter with about $4 million in price improvements and a strong demand from China. They expect this trend to slow down, however, and are predicting a softer pulp market in the year’s second half.
Energy-related capital upgrades at Powell River continue and are scheduled for completion by March 31, 2012. Along with upgrades at Port Alberni, the project is expected to deliver annual improvements of $5 million to earnings loss before interest, taxes, depreciation and amortization.
