Resolute Forest Products has reported sales of $945m – an increase of $72m from the year-ago period – in its first quarter results, as its tissue segment incurs a $9m operating loss.
Net income for the quarter ended 31 March was $210m compared to $87m in the same period in 2021.
Operating income of $235m compared to an operating loss of $101m in the fourth quarter, a reflection of higher selling prices in all segments ($206m) and the net favourable impact of the indefinite idling of pulp and paper operations at the Calhoun (Tennessee) mill ($7m).
Remi G. Lalonde, President and Chief Executive, said: “We further strengthened the balance sheet with significant cash generation and improved the competitiveness of our business with two tuck-in acquisitions.
“Our earnings and cash position reflect favourable pricing momentum in all of our segments, but the transportation network improvements were slower than expected, which led to lower sales volume and higher inventory levels.
“With our strong balance sheet and liquidity well over $1bn we benefit from enhanced flexibility to generate long-term value for shareholders and to drive sustainable economic activity in the communities where we operate.”
The company’s tissue segment incurred an operating loss of $9m in the quarter compared to an operating loss of $6m in the fourth quarter.
The average transaction price increased by $47 per short tonne, or 2%, due to better product mix, and shipments rose by 1,000 short tonnes.
The delivered cost increased by $141 per short tonne, or 7%, mostly due to higher pulp prices, including the loss of pulp integration with the pulp capacity curtailment at the Calhoun mill.
EBITDA in the segment fell by $3m to a negative $4m.
In market pulp, the segment reported operating income of $22m in the first quarter, $3m higher than in the prior quarter.
The average transaction price increased by $9 per metric tonne, or 1%, and the delivered cost fell by $8 per metric tonne.
Shipments were 28,000 metric tonnes lower due to the capacity curtailment at the Calhoun mill and logistics constraints.
The paper segment recorded operating income of $25m in the quarter, an improvement of $29m over the previous quarter.
The average transaction price rose by $37 per metric tonne, or 5%, due to favourable market conditions in all grades. The business has also surpassed its 30% absolute greenhouse gas emissions (scope 1 and 2) reduction target, cutting them by 34% compared to 2015 levels.