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FLETCHER CHALLENGE CANADA LTD. ANNOUNCES LOSS

 VANCOUVER, British Columbia, Jan. 13 /PRNewswire/ -- Fletcher Challenge Canada Ltd. (Vancouver, Toronto, Montreal: FCC.A) today announced a net loss of $4.8 million, or 6 cents per common share, for the three months ended Dec. 31, 1992. The results compare with net earnings of $17.2 million, or 28 cents per common share, for the same period in 1991. The year-ago earnings, however, included a non- recurring net gain of $35.3 million related primarily to the sale of the company's 45 percent interest in an affiliate, Donohue St- Felicien Inc.
 The result for the quarter represents a significant turnaround from the $18.8 million net loss recorded for the three months ended Sept. 30, 1992.
 Sales for the quarter increased to $263 million from $250 million a year earlier despite the absence of production from the Hammond sawmill, sold in December 1991, and lower newsprint prices. The increase in sales reflects increases in shipments of 49 percent for newsprint and 11 percent for lightweight coated paper, combined with improved pulp and lumber prices and a favorable movement in Canadian- U.S. dollar exchange rates.
 Cash flow from operations at $.6 million was above break-even for the second consecutive quarter. Capital spending of $7 million for the quarter was down from $32.8 million for the same period last year. With capital spending in excess of $1.2 billion over the past five years, the company has now completed a major program to modernize and environmentally upgrade its facilities. The company has completed its capital upgrade while maintaining a strong balance sheet, and its present debt to equity ratio of 29-to-71 is one of the healthiest in the industry.
 The company has a fiscal year-end of June 30. For the six months ended Dec. 31, 1992, a net loss of $23.6 million, or 30 cents per common share, compares with net earnings of $.9 million, or 1 cent per common share, for the same period a year ago. The higher earnings in the 1991 period also included the non-recurring net gain of $35.3 million.
 Sales for the six months ended Dec. 31, 1992 declined to $470 million from $502 million one year earlier. The absence of production from the Hammond sawmill, the month-long B.C. pulp and paper industry strike early in the six-month period and lower newsprint prices contributed to the drop in sales.
 Company President Doug Whitehead said the company's second quarter result offered encouragement that a recovery is starting to build. "Our loss of $18.8 million from the previous quarter was reduced by 75 percent to $4.8 million and we maintained positive cash flow from our operations," he said.
 Whitehead said consumption levels for newsprint and lightweight coated paper are improving and some price recovery is underway, but cautioned that pulp prices would remain under pressure in the near term as a result of excessive inventories in the marketplace.
 He also noted that increasing North American lumber prices have resulted from pressure on supply at a time when home construction activity is beginning to improve. "These factors, combined with an improving Japanese lumber market, are contributing to a significant improvement in earnings from the company's six sawmills and from its log trading activities," Whitehead said.
 "Indications are that markets will continue to improve during the second half of the company's fiscal year. Longer term, the company's strong balance sheet, its focus on maximizing operating efficiencies and the completion of its major modernization and environmental capital programs should lead to a significant improvement in earnings and cash flow as markets recover,"
 FLETCHER CHALLENGE CANADA LTD.
 Consolidated Supplemental Information
 (in millions of dollars)
 (unaudited)
 3 Months Ended 6 Months Ended
 Dec. 31, Dec. 31,
 1992 1991 1992 1991
 Earnings
 Net sales $263.3 $250.0 $470.3 $501.6
 Cost of products sold 220.1 240.4 408.0 467.4
 Depreciation, depletion
 and amortization 24.9 23.3 46.0 46.3
 Selling and administration 16.8 16.2 32.3 33.1
 Subtotal 261.8 279.9 486.3 546.8
 Total 1.5 (29.9) (16.0) (45.2)
 Earnings from associate
 companies before income
 taxes -- 0.7 -- 1.3
 Operating earnings (loss) 1.5 (29.2) (16.0) (43.9)
 Interest expense 12.3 17.6 23.5 32.4
 Gain on disposal of fixed
 assets and investments 1.2 58.1 1.7 58.0
 Investment and other income 3.2 1.7 2.4 5.4
 Earnings (loss) before
 income taxes (6.4) 13.0 (35.4) (12.9)
 Income taxes (recovery) (1.6) (4.2) (11.8) (13.8)
 Net earnings (loss) ($4.8) $17.2 ($23.6) $0.9
 Net earnings (loss) per
 weighted average common
 share (in dollars) ($0.06) $0.28 ($0.30) $0.01
 Weighted average shares
 outstanding (000) 77,289 60,186 77,174 60,169
 Period ending shares
 outstanding (000) 78,309 60,186 78,309 60,186
 Other Information
 Cash generated from
 (applied to) operations $0.6 ($19.9) $2.8 ($49.8)
 Additions to fixed assets $7.0 $32.8 $10.4 $63.7
 Total assets $1,891.0 $1,856.9
 Long-term debt $455.1 $591.8
 Ratio of debt to equity 0.42 0.69
 Product shipments
 3 Months Ended 6 Months Ended
 Dec. 31 Dec. 31
 1992 1991 1992 1991
 Newsprint - M tons 113 76 182 159
 Market kraft pulp
 - M tons (1) 90 95 151 179
 Lightweight coated paper
 - M short tons 109 98 228 199
 Lumber - MMBM 157 176 276 361
 (1) excludes shipments to
 Blandin - M tons 20 17 29 30
 -0- 01/13/93
 /CONTACT: John Graf, VP-Treasurer of Fletcher Challenge Canada, 604-654-4383/
 (FCC.A)


CO: Fletcher Challenge Canada Ltd. ST: British Columbia IN: PAP SU: ERN

MS -- LA034 -- 4583 01/13/93 16:54 EST
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