Repap Enterprises Inc. reports 1999 second quarter results
STAMFORD, CT., July 27 /CNW-PRN/ - Repap Enterprises Inc. today reported
results for the second quarter ended June 30, 1999. Repap recorded a loss for
the quarter of $13.5 million ($0.02 per share) compared with a net loss of
$49.0 million ($0.07 per share) in the second quarter of 1998. The second
quarter of 1998 included one time refinancing charges of $46.3 million.
Excluding one time charges, the second quarter of 1998 loss was $2.7 million.
Revenues from operations for the second quarter of 1999 were $142.4
million, down $26.4 million or 15.6% from revenues of $168.8 million in the
second quarter of 1998. Revenues from coated paper were $124.4 million, down
$23.6 million from the second quarter of 1998, reflecting mainly the impact of
significantly lower pricing resulting from weak paper markets and lower
shipments due to a six-day strike in the paper and kraft pulp operations. Pulp
revenues for the second quarter of 1999 were $12.4 million, down $2.3 million
from the second quarter of 1998, reflecting lower shipments.
Repap's operating profit, before depreciation and amortization, and
excluding non-cash currency adjustments, (''EBITDA'') was $27.7 million for
the second quarter compared to an EBITDA of $44.9 million in the second
quarter of 1998 and to an EBITDA of $39.0 million in the first quarter of
1999.
Repap's loss for the six months ended June 30, 1999 was $22.8 million
($0.03 per share) compared to a loss of $31.7 million ($0.05 per share) in the
corresponding period of 1998. 1998 results included net one time charges of
$28.5 million. Revenues for the first half of 1999 totaled $305.0 million,
down $27.1 million from the first half of 1998 revenues of $332.1 million,
reflecting lower pricing in all product lines. EBITDA in the first half was
$66.7 million down from $90.1 million reported in the first half of 1998.
During the second quarter of 1999, the paper and kraft pulp operations
were negatively impacted by a six-day labor strike resulting in lost
production of 8,700 tons of coated paper and 5,300 metric tons of kraft pulp.
A new six-year collective agreement with the employees was reached on June 10,
1999 and operations immediately resumed. A thirty-day strike also occurred at
the Company's Blackville sawmill. A new four-year collective agreement was
reached with these employees on July 16, 1999 and operations have resumed.
During the quarter, Repap successfully completed a US$100 million, 11.5%
Senior Secured Note Offering due June 2004. Proceeds were used to repay all
amounts outstanding under Repap New Brunswick's operating credit facility and
to provide increased liquidity. Cash on hand at June 30, 1999 was $72.3
million.
Mr. Stephen C. Larson, President and CEO, had the following comments,
''The second quarter of 1999 was unfortunately marked by two strikes which
negatively impacted operating results. In addition, prices for coated paper
declined from the first quarter reflecting a weak market environment. On the
brighter side, recovery from the work stoppages was excellent with new
quarterly daily production records set once again in the coated paper
operations as well as the groundwood pulp mill. Markets for both kraft pulp
and coated paper are beginning to show signs of strengthening as our backlogs
are strong and modest improvement in pricing is occurring for the first time
in a year as we enter the seasonally strong period for our customers.''
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