Resolute Forest Products has said it is optimistic for near-term performance improvements in its pulp and paper segments as it reports its preliminary first quarter 2021 results.
Net income for the quarter ended 31 March was $87m compared to net loss of $1m in the same period in 2020.
Sales were $873m in the quarter, an increase of $184m from the year-ago period.
Excluding special items, net income was $119m compared to a net loss of $29m in the first quarter of 2020.
Remi G. Lalonde, President and Chief Executive, said: “This has been a very good quarter for our strong and growing wood products business as the lumber tailwind continues.
“We are making good progress with the ramp-up at our El Dorado (Arkansas) and Ignace (Ontario) sawmills, both of which are now running on two-shifts, helping to increase production in favoUrable markets.
“Our balance sheet got stronger and our business more competitive this quarter.”
Its wood products segment generated operating income of $221m in the quarter, up $93m from the fourth quarter due to a $266 per thousand board foot increase in the average transaction price, or 44%, on strong lumber demand.
The operating cost per unit increased by $49 per thousand board feet, or 13%. EBITDA in the segment improved by $93m to $232m.
In its market pulp division, operating income was $4m, an improvement of $8m over the previous quarter.
The average transaction price rose by $51 per metric tonne, or 9%, with gains in all virgin fibre grades. EBITDA in the segment improved by $8 million, to $10 million.
Resolute’s tissue segment incurred an operating loss of $2m in the quarter compared to an operating loss of $3m in the fourth quarter.
The results include $1m in costs for the ramp-up of the recently-acquired Hagerstown (Maryland) converting facility. The segment generated EBITDA of $3m, up $1m.
Lalonde added: “In tissue, we expect pressure on pricing and volume in the second quarter.
“Building on higher realised prices in the first quarter, we are optimistic for near-term performance improvements in our pulp and paper segments, as we continue to recover from the difficult economic effects of the pandemic.”
Resolute also announced its commitment to reduce absolute greenhouse gas (GHG) emissions (scope 1 and 2) by 30% against 2015 levels by 2025.
The new target builds on the company’s 83% reduction in absolute GHG emissions from year-2000 levels, two-thirds of which reflect reductions in emission intensity.
A spokesman for the company told TWM: “Q1 was an exceptional quarter for EBITDA generation, which underscores the strength and scale of our growing lumber business.
“As for near-term financial performance, we’re optimistic that lumber will provide for another very strong quarter based on market conditions and our healthy order book.”