Canada's forest and paper sector losses slowed in Q2 of 2009: PricewaterhouseCoopers



    
    Producers based in West see modest improvements; aggregate losses deepen
    in the East due to AbitibiBowater restructuring
    

    VANCOUVER, Sept. 1 /CNW/ - Canada's forest, paper & packaging (FPP)
sector continued to be negatively impacted by the global economic downturn
during the second quarter of 2009. According to the PricewaterhouseCoopers
(PwC) quarterly net earnings review, weak commodity prices and low demand
throughout most of the period resulted in aggregate second quarter losses of
C$660 million for the 15 companies surveyed, compared to losses of C$462
million during the same period in 2008. These losses are on top of net losses
of C$480 million in Q1 of 2009.
    One bright spot toward the end of Q2 was an improvement in pulp prices as
exports to China increased. Costs of fibre, energy and other inputs were lower
during the quarter compared to last year. The Canadian - US dollar exchange
rate was 13% weaker compared to the same period in 2008.
    During Q2 of 2009 Western Canadian FPP companies reported aggregate
losses of C$83 million, an improvement over the C$128 million loss posted in
the same period of 2008. Four of the nine Western Canada companies in PwC's
survey showed earnings improvements compared to Q2 of 2008; three of these
posted positive earnings.
    Eastern Canadian producers posted an aggregate loss of C$577 million
compared to a loss of C$334 million during Q2 of 2008. Four of the six Eastern
companies surveyed reported improved results, however these modest
improvements were overshadowed by C$384 million of closure, impairment and
reorganization charges by AbitibiBowater. Two of the Canadian companies
benefitted from US$191 million of US alternative fuel tax credits.
    "Some of Canada's larger forest products companies will continue to have
financial struggles until there is a sustained economic turnaround and demand
picks up," says Craig Campbell, leader, Performance Improvement, Global
Forest, Paper & Packaging Industry practice for PwC. "The story in the US was
different during the quarter, with the ten largest forest products companies
posting combined profits of US$839 million, primarily due to approximately
US$1 billion in alternative fuel tax credits."
    The ten largest European-based forest products companies incurred
aggregate losses of (euro)412 million in the second quarter of 2009, a drop of
(euro)871 million from the positive earnings of (euro)459 million in the same
period of 2008.

    
    Western Canada Company Performance

    -------------------------------------------------------------------------
    Net Earnings (Loss): Western Canada
    -------------------------------------------------------------------------
    (Three months ended June 30th - C $ millions)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Company                                              2009 Q2     2008 Q2
    -------------------------------------------------------------------------
    Ainsworth                                                $25        ($34)
    -------------------------------------------------------------------------
    Millar Western                                           $12          $2
    -------------------------------------------------------------------------
    Canfor                                                   $11         $64
    -------------------------------------------------------------------------
    Catalyst                                                 ($2)      ($124)
    -------------------------------------------------------------------------
    Interfor                                                ($15)       ($28)
    -------------------------------------------------------------------------
    Mercer                                                  ($18)         $1
    -------------------------------------------------------------------------
    TimberWest                                              ($27)         $2
    -------------------------------------------------------------------------
    Western                                                 ($30)       ($14)
    -------------------------------------------------------------------------
    West Fraser                                             ($39)         $3
    -------------------------------------------------------------------------
    Total                                                   ($83)      ($128)
    -------------------------------------------------------------------------


    Eastern Canada Company Performance

    -------------------------------------------------------------------------
    Net Earnings (Loss): Eastern Canada
    -------------------------------------------------------------------------
    (Three months ended June 30th - C $ millions)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Company                                              2009 Q2     2008 Q2
    -------------------------------------------------------------------------
    Domtar                                                   $56         $24
    -------------------------------------------------------------------------
    Cascades                                                 $30        ($25)
    -------------------------------------------------------------------------
    Fraser Papers                                            ($9)       ($16)
    -------------------------------------------------------------------------
    Norbord                                                 ($21)       ($36)
    -------------------------------------------------------------------------
    Tembec                                                  ($38)       ($27)
    -------------------------------------------------------------------------
    AbitibiBowater                                         ($595)      ($254)
    -------------------------------------------------------------------------
    Total                                                  ($577)      ($334)
    -------------------------------------------------------------------------
    

    A pdf of the PwC Q2 2009 Global Forest & Paper Industry Net Earnings
Summary is available to download at:
www.pwc.com/ca/en/forest-paper-packaging/global-net-earnings-summary.jhtml

    About PricewaterhouseCoopers LLP

    PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance,
tax and advisory services to build public trust and enhance value for its
clients and their stakeholders. More than 155,000 people in 153 countries
across our network share their thinking, experience and solutions to develop
fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP
(www.pwc.com/ca) and its related entities have more than 5,200 partners and
staff in offices across the country.
    "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership, or, as the context requires, the
PricewaterhouseCoopers global network or other member firms of the network,
each of which is a separate and independent legal entity.





For further information:

For further information: Jim Nelson, (604) 806-7047,
jim.nelson@ca.pwc.com; Kiran Chauhan, (416) 947-8983,
kiran.chauhan@ca.pwc.com; Olivia Boucherie, (514) 205-5335,
olivia.boucherie@ca.pwc.com

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