REPAP ENTERPRISES INC. REPORTS FOURTH QUARTER RESULTS
STAMFORD, Connecticut, Feb. 2 /CNW - PRN/ - Repap Enterprises Inc. today reported results for the fourth quarter ended December 31, 1997. Net income for the fourth quarter of 1997 was $49.4 million ($0.07 per share) including a net gain from discontinued operations of $57.4 million. These results compared to a net income of $65.2 million ($0.12 per share) in the third quarter of 1997, including a net gain from discontinued operations of $121.0 million, and to a loss of $364.2 million ($2.95 per share) in the fourth quarter of 1996, which included a loss from discontinued operations of $322.0 million.
Excluding the gains or losses recorded from discontinued operations, Repap's loss from continuing operations was $8.0 million in the fourth quarter of 1997 compared to a loss of $55.8 million in the third quarter of 1997 and a loss of $42.2 million in the fourth quarter of 1996.
Repap's fourth quarter 1997 operating profit before depreciation and amortization and before non-cash hedged foreign exchange adjustments (''EBITDA'') was $36.0 million compared to $18.6 million in the third quarter 1997 and $10.7 million in the fourth quarter of 1996. The third quarter of 1997 included downsizing costs of $15.2 million and the fourth quarter included downsizing related costs of $3 million.
Cash provided from operations after working capital changes totalled $3.4 million in the fourth quarter compared to a cash utilization of $17.2 million in the third quarter of 1997, an improvement of $20.6 million.
Commenting on the results and on the outlook, Stephen Larson, President and Chief Executive Officer, said, ''We are pleased with the progress being made in all areas of our operations. Production continues to increase with records being set in most areas during the fourth quarter. Costs continue to be managed tightly and we are seeing the benefits develop in our results. A US $60/ton increase in groundwood coated paper prices was implemented in January and the first quarter order book is strong.''
YEAR OVER YEAR REVIEW
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The net loss for the year, after discontinued operations, was $63.5 million ($0.17 per share) compared to a net loss of $496.0 million ($4.02 per share) for the year 1996. The 1997 results included a net gain from discontinued operations of $73.8 million, reflecting mainly the sale of Repap Manitoba and Repap USA, compared to a net loss from discontinued operations of $402.2 million in 1996, reflecting the write-off of Alcell technology related operations and Repap British Columbia.
The net loss from continuing operations was $137.3 million in 1997 compared to $93.8 million in 1996. Results from continuing operations in 1997 were negatively impacted by charges for downsizing of approximately $20.2 million, higher foreign exchange losses of $15.7 million and the write-off of obsolete assets of $4.2 million.
Revenues for 1997 totalled $609.9 million, up 8% from 1996 revenues of $564.0 million. Revenues from the coated paper segment were reported at $501.6 million, up 4% over 1996 coated paper revenues of $481.2 million. While overall coated paper pricing was lower in 1997 compared to 1996, shipments increased 15% from 384,000 tons in 1996 to 443,000 tons in 1997. Revenues and shipments from Repap's pulp operations were up 33% in 1997 over 1996. Lumber revenues were up 22% while shipments were up 7% over 1996.
Repap Enterprises Inc. is a major producer of coated groundwood paper with nine percent of North American capacity. This high quality paper is utilized in magazines, catalogs, inserts and commercial printing applications. The Company's world-class coated paper complex in New Brunswick has two modern paper machines with a design capacity of 492,000 tons, a northern bleached softwood kraft pulp mill with an annual capacity of 235,000 metric tons, an integrated groundwood pulp mill with an annual capacity of 123,000 metric tons and lumber operations with an annual capacity of 58 mmbf. |
