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Gold/Mining/Energy : Repap (RPAPF) -- Ignore unavailable to you. Want to Upgrade?

To: leigh aulper who wrote (195)	7/22/1998 9:13:00 AM
From: The Osprey	Respond to of 485

I would say this looks as though this is showing that the plan is on track in general.Let's see what trading does with this to-day. Repap Enterprises Inc - Second quarter results Repap Enterprises Inc RPP Shares issued 742,460,637 1998-07-21 close $0.23 Wednesday Jul 22 1998 Mr. Stephen Larson reports For the second quarter ended June 30, 1998, including the losses on discontinued operations and unusual items, Repap recorded a loss of $49.0-million (seven cents per share) compared with a loss of $52.2-million (42 cents per share) in the second quarter of 1997. Excluding discontinued operations and unusual items, Repap's loss from continuing operations was $2.4-million for the second quarter of 1998 compared with a loss from continuing operations of $31.4-million in the second quarter of 1997. The second quarter of 1998 included a loss from discontinued operations of $0.3-million and a loss from unusual charges of $46.3-million, reflecting one-time costs associated with the refinancing of Repap New Brunswick's US$300-million first priority senior secured notes due 2000. The unusual costs included the non-cash writeoff of deferred foreign exchange losses and deferred financing costs ($28.3-million) and the costs of early redemption and certain consent payments ($18.0-million) related to the notes. During this second quarter of 1997, a net loss of $20.8-million from discontinued operations was recorded, reflecting mainly operating losses incurred during that period related to discontinued operations. Revenues from continuing operations for the second quarter of 1998 were $168.8-million, up 13.1 per cent from revenues of $149.3-million in the second quarter of 1997 and up 3.4 per cent from revenues of $163.3-million in the first quarter of 1998. Revenues from coated paper were $148.0-million, up $26.9-million or 22.2 per cent over the second quarter of 1997, revenues of $121.1-million, reflecting increased pricing and shipments. Pulp revenues for the second quarter of 1998 were $14.7-million, down by $5.1-million or 25.8 per cent from the second quarter of 1997, revenues of $19.8-million, reflecting mainly lower shipments. Revenues from lumber were $6.1-million in the second quarter of 1998 compared to $8.4-million in the same period of 1997, a decrease of $2.3-million or 27.4 per cent, reflecting mainly lower pricing. Repap's operating profit from continuing operations, excluding non-cash hedged foreign exchange adjustments, (EBITDA) was $44.9-million for the second quarter of 1998 compared to an EBITDA of $22.2-million in the second quarter of 1997 and to an operating profit of $45.2-million in the first quarter of 1998. Revenues for the six months ended June 30, 1998 were $332.1-million up 14.4 per cent from the $290.2-million reported for the corresponding period in 1997, reflecting higher coated paper prices. EBITDA for the six months of 1998 was $90.1-million compared to $28.7-million for the same period in 1997. Repap recorded a loss of $31.7-million (five cents per share) in the first six months compared to a loss of $178.1-million ($1.44 per share) last year. Excluding discontinued operations and unusual charges, the loss for the first half of 1998 was $3.2-million compared to a loss of $73.5-million in the first half of 1997. During the second quarter of 1998, Repap completed a major recapitalization which included the following elements: 1. The issue by Repap Enterprises of $45-million (U.S.), six per cent, convertible debentures due 2005 to Enron Capital and Trade Resources. The proceeds, along with cash on hand, were used to repay in full the $75-million, nine per cent, debentures maturing in June 1998. 2. Along with this investment, Repap New Brunswick entered into a product price hedging program with Enron designed to partially protect the company against the volatility of commodity prices. A five year energy advisory agreement was also signed with Enron, whereby Enron will work with the operations to review and analyze all energy related activities and develop a cost savings program in which both Repap New Brunswick and Enron will share in any realized savings. Finally, Enron has also taken on the pulp marketing agency function for Repap New Brunswick and is responsible for the marketing, sales and customer service functions related to pulp. 3. During the second quarter, Repap New Brunswick successfully completed a $320-million (U.S.) financing comprised of $200-million (U.S.), nine per cent, first priority fixed rate senior secured notes due 2004 and $120-million (U.S.) floating rate senior secured loans due 2004. The proceeds of the issue were used to repay or redeem the existing first priority fixed and floating rate notes due 2000, including premiums on redemption. The refinancing increased financial flexibility through the extension of maturity dates and elimination of mandatory fixed principal repayments, while maintaining flexibility in repayment of debt through the floating rate tranche. Repap New Brunswick also completed the renewal of a $120-million operating credit facility maturing in October 1999 and received consents to amalgamate with the holding company in January 1999. The company was successful in achieving several objectives during the second quarter including a repayment of the $75-million convertible debentures without any immediate dilution to shareholders and a recapitalization of Repap New Brunswick which will improve financial flexibility. The creative partnership with Enron is well under way. None of these objectives would have been achieved without the tremendous performance of the operations. The second quarter marked the third consecutive quarterly production record for coated paper and costs continue to decline. STATEMENT OF EARNINGS Three months ended June 30 (in millions of dollars) 1997 1998 Revenues $ 149.3 $ 168.8 Hedge foreign ex- change adjustment (1) 1.7 1.7 ------- ------- Net revenues 147.6 167.1 ------- ------- Net sales 133.7 151.2 Cost of sales 102.7 99.4 Selling, admin and research 10.5 8.6 ------- ------- Operating margin 20.5 43.2 Depreciation and amortization 14.6 15.0 ------- ------- Operating profit (loss) 5.9 28.2 Interest expense 31.5 27.0 Other expenses (income) 0.2 1.8 ------- ------- Pre-tax loss (25.8) (0.6) Provision for income taxes (2) 0.5 0.5 ------- ------- Loss from continuing operations (26.3) (1.1) Unusual item (3) 0.0 46.3 Provision for accretion of paid-in capital 5.1 1.3 ------- ------- Net loss from continu- ing operations (31.4) (48.7) Discontinued operations (4) (20.8) (0.3) ------- ------- Net income (loss) $ (52.2) $ (49.0) ======= ======= EBITDA (5) $ 22.2 $ 44.9 ======= ======= Earnings (loss) per share: Continuing (25 cents) (7 cents) Discontinued (17 cents) (0 cents) -------- ------- Total (42 cents) (7 cents) ======== ======= SHIPMENTS (IN THOUSANDS) Coated paper (tons) 110 114 Pulp (tonnes) 27 20 Lumber (mmbf) 18 16 Revolving credit facilities (6) $ 187.2 $ 88.3 Capital expenditures $ 2.1 $ 5.5 Cash from (used by) operations $ (9.9) $ 18.6 Non-cash working capital changes 26.1 (22.3) ------- ------- Cash from (used by) operations after working capital changes $ 16.2 $ (3.8) ------- ------- STATEMENT OF EARNINGS Six months ended June 30 (in millions of dollars) 1997 1998 Revenues $ 290.2 $ 332.1 Hedge foreign exchange adjustment (1) 2.9 2.9 ------- ------- Net revenues 287.3 329.2 ------- ------- Net sales 257.4 298.1 Cost of sales 211.5 194.4 Selling, admin and research 20.1 16.5 ------- ------- Operating margin 25.8 87.2 Depreciation and amortization 26.8 31.1 ------- ------- Operating profit (loss) (1.0) 56.1 Interest expense 61.4 53.5 Other expenses (income) (0.2) 1.6 ------- ------- Pre-tax loss (62.2) 1.0 Provision for income taxes (2) 1.2 1.3 ------- ------- Loss from continuing operations (63.4) (0.3) Unusual item (3) 0.0 46.3 Provision for accretion of paid-in capital 10.1 2.9 ------- ------- Net loss from continu- ing operations (73.5) (49.5) Discontinued operations (4) (104.6) 17.8 ------- ------- Net income (loss) $(178.1) $ (31.7) ======= ======= EBITDA (5) $ 28.7 $ 90.1 ======= ======= Earnings (loss) per share Continuing (60 cents) (7 cents) Discontinued (84 cents) 2 cents -------- ------- Total ($1.44) (5 cents) SHIPMENTS (IN THOUSANDS) Coated paper (tons) 220 226 Pulp (tonnes) 58 33 Lumber (mmbf) 31 28 Revolving credit facilities (6) $ 187.2 $ 88.3 Capital expenditures $ 2.7 $ 8.2 Cash from (used by) operations $ (33.6) $ 34.4 Non-cash working capital changes 45.2 0.9 ------- ------- Cash from (used by) operations after working capital changes $ 11.6 $ 35.4 (1) Represents non-cash impact of hedged currency exchange losses. (2) Virtually no deferred income tax provision is currently being recorded in the accounts. (3) Reflects costs associated with Repap New Brunswick refinancing. (4) Discontinued operations reflect the operations and proceeds from sale of Repap British Colombia, Alcell, Repap USA, Repap Manitoba and Atholville magnefite pulp mill. (5) EBITDA = Operating profit plus depreciation and amortization plus non-cash hedged foreign exchange loss. (6) Under Canadian GAAP, prior period balance sheets are not restated for discontinued operations, therefore prior periods include the revolvers of discontinued operations.