Repap New Brunswick Inc. Reports Second Quarter
Results
MONTREAL, July 28 /PRNewswire/ -- Repap New Brunswick Inc. today reported results for the
quarter ended June 30, 1997. Repap New Brunswick recorded a net loss of $18.8 million in the
second quarter of 1997, compared with a net loss of $7.8 million in the second quarter of 1996.
Revenues were $147.5 million, essentially unchanged from $146.7 million realized in the second
quarter of 1996. Higher volumes, lower paper production costs and the favourable impact of a
weaker Canadian dollar partially offset the unfavourable impact of lower paper prices resulting in an
operating margin of $21.9 million in the second quarter of 1997, compared with $27.1 million in the
second quarter of 1996; however, compared with the first quarter of 1997, Repap New
Brunswick's second quarter operating margin was up $14.5 million, reflecting higher paper prices,
lower coated paper production costs and the favourable impact of a weaker Canadian dollar.
Cash used in operations before working capital changes was $3.5 million in the second quarter of
1997. A reduction in working capital of $18.3 million resulted in cash flow from operations after
working capital changes of $14.8 million.
Commenting on the outlook for the New Brunswick operations, George S. Petty, Chairman and
Chief Executive Officer, said, ``Short and longer-term market fundamentals for coated groundwood
paper appear to be favourable. Prices increased US$60 per ton in the second quarter, and a further
price increase of US$80 per ton is being implemented in the third quarter. Pulp prices are also
increasing, and an aggressive program to reduce costs by over $20 million in 1997 compared with
1996 is expected to further benefit Repap New Brunswick's operating margins.''
The Company's world-class coated paper complex on the Miramichi River in New Brunswick has
two modern coated paper machines with a design capacity of 492,000 tons and a northern bleached
softwood kraft pulp mill with an annual capacity of 235,000 metric tons, as well as an integrated
groundwood pulp mill. Repap New Brunswick is a subsidiary of Repap Enterprises Inc.
REPAP NEW BRUNSWICK
CONSOLIDATED STATEMENTS OF INCOME
(Millions of Canadian dollars)
Quarter Ended
June 30 Mar 31 June 30 Yr Over Yr Qtr Over Qtr
1996 1997 1997 % Change % Change
Revenues $ 146.7 $ 139.8 $ 147.5 1% 6%
Net sales 128.6 121.6 129.5
Cost of sales 96.0 108.8 102.7 7% -6%
Selling, administra-
tive and research 5.5 5.4 4.9
Operating margin
(EBITDA) 27.1 7.4 21.9 -19% 196%
Depreciation &
amortization 9.9 10.9 13.5
Operating profit 17.2 (3.5) 8.4
Interest expense
and amortization
of financing fees 25.2 25.3 26.0
Other expenses
(income) (0.6) (0.3) 0.7
Pre-tax income
(loss) (7.4) (28.5) (18.3)
Unusual item --- 23.0 ---
Provision for income
taxes (1) 0.4 0.5 0.5
Net income (loss) $ (7.8) $ (52.0) $ (18.8)
Revolving credit
facility (period
end) $ 113.0 $ 113.1 $ 100.6
Capital expenditures $ 2.9 $ 0.6 $ 2.1
Cash from operations
before working
capital changes $ 3.9 $ (16.7) $ (3.5)
Non-cash working
capital changes $ (15.6) $ 20.7 $ 18.3
Cash from operations
after working
capital changes $ (11.7) $ 4.0 $ 14.8
Revenues by segment (in millions)
Coated Paper $ 123.7 $ 112.6 $ 121.0
Pulp 18.8 22.1 19.8
Lumber 5.8 6.3 8.4
Hedged foreign exchange
adjustment (2) (1.6) (1.2) (1.7)
Total Revenues $ 146.7 $ 139.8 $ 147.5
Shipments (in thousands)
Coated Paper (tons) 93 110 110 18% 0%
Pulp (tonnes) 28 31 27 -4% -13%
Lumber (Mfbm) 14 13 17 21% 31%
Six Months Ended
June 30 June 30
1996 1997 % Change
Revenues $ 276.6 $ 287.3 4%
Net sales 242.7 251.1
Cost of sales 163.8 211.5 29%
Selling, administra-
tive and research 10.6 10.3
Operating margin
(EBITDA) 68.3 29.3 -57%
Depreciation &
amortization 20.8 24.4
Operating profit 47.5 4.9
Interest expense
and amortization
of financing fees 49.1 51.3
Other expenses
(income) (0.3) 0.4
Pre-tax income
(loss) (1.9) (46.8)
Unusual item --- 23.0
Provision for income
taxes (1) 1.0 1.0
Net income (loss) $ (2.9) $ (70.8)
Revolving credit
facility (period
end) $ 113.0 $ 100.6
Capital expenditures $ 5.0 $ 2.7
Cash from operations
before working
capital changes $ 24.1 $ (20.2)
Non-cash working
capital changes $ (42.0) $ 39.0
Cash from operations
after working
capital changes $ (17.9) $ 18.8
Revenues by segment (in millions)
Coated Paper $ 244.4 $ 233.6
Pulp 28.5 41.9
Lumber 9.6 14.7
Hedged foreign exchange
adjustment (2) (5.9) (2.9)
Total Revenues $ 276.6 $ 287.3
Shipments (in thousands)
Coated Paper (tons) 171 220 29%
Pulp (tonnes) 38 58 53%
Lumber (Mfbm) 26 30 15%
(1) No deferred income tax provision is currently being recorded in the accounts of the
Corporation.
(2) Represents non-cash impact of hedged currency exchange losses.
SOURCE: Recap New Brunswick Inc.
Contact: Stephen C. Larson, President & COO, 514-846-1316, or Kathleen V. Cornish, Vice-President, Investor
Relations, 514-846-6220, both of Repap New Brunswick |
