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FLETCHER CHALLENGE CANADA LTD. REPORTS EARNINGS

 FLETCHER CHALLENGE CANADA LTD. REPORTS EARNINGS
 VANCOUVER, British Columbia, Oct. 22 /PRNewswire/ -- Fletcher


Challenge Canada Ltd. (Toronto, Montreal, Vancouver: FCC) today reported a net loss of $18.8 million, or 24 cents per common share, for the three months ended Sept. 30, 1992. This compares with a net loss of $16.3 million, or 27 cents per share, for the same period one year ago.
 The company announced earlier this year that its fiscal year-end has changed to June 30 from Dec. 31. The period reported today represents the first quarter of the fiscal year ending June 30, 1993.
 Sales for the quarter declined to $207 million from $252 million a year go. The comparative drop in sales resulted mainly from production lost during a month-long B.C. pulp and paper industry strike, lower newsprint prices, and the absence of lumber production from the Hammond sawmill, sold in December 1991.
 Doug Whitehead, president and chief executive officer for Canadian operations, said the results for the quarter reflect the fact the industry is still struggling toward recovery. However, they improved from the net loss of $20.1 million reported for the immediately preceding quarter, ended June 30, 1992.
 "This improvement was encouraging in that it was achieved despite the impact of the strike on our operations," Whitehead said. "It reflected the benefits of the company's ongoing initiatives to strengthen operations and reduce costs, as well as some improvements in generally depressed markets and a favorable movement in Canadian- U.S. dollar exchange rates.
 "With our major capital expenditure and asset restructuring programs virtually complete, we are in an excellent position to realize significant gains from cost and operating efficiencies as markets improve."
 Cash flow from the company's operations turned positive at $2.2 million for the quarter, in contrast to a net outflow of $29.9 million a year ago.
 Capital spending for the quarter was reduced to $3.4 million from $30.9 million in the corresponding period last year. The $1.8 million in after-tax restructuring expenses included in the quarter's results all but complete such expenditures, which have totalled $6.5 million over the past three quarters as the company refocused its business activities. Both earnings and the company's balance sheet benefited from the proceeds of a $246 million share issue in May 1992, used to reduce debt levels and lower interest expense.
 "In the marketplace, improving demand for northern bleached softwood kraft pulp resulted in higher prices," Whitehead said. "Current prices are up approximately US$80 - 100 per ton from the extremely depressed levels of a year ago."
 Shipments of lightweight coated paper produced by the company's Minnesota-based subsidiary, Blandin Paper Co., were 18 percent higher than in the same period a year ago, reducing inventories to normal levels. "The stronger demand reflected seasonal Christmas catalog printing activity as well as orders placed by buyers to avoid an announced price increase," Blandin Chief Executive Officer Al Wallace said.
 U.S. lumber markets showed slight improvement during the quarter, reflecting a rise in housing starts. Log markets remained strong through the quarter due largely to coastal supply shortages.
 Whitehead said that against the various company achievements and positive indicators, "the major disappointment has been the persistent weak demand and acute oversupply of newsprint, which has resulted in production curtailments and a deterioration in prices from a year ago. Also, offshore markets for lumber, particularly in the United Kingdom, have remained weak.
 "While the slow pace of world economic recovery is likely to result in continuing difficult market conditions in the near term future, the company's order book for all products has strengthened recently. The company's focus on cash conservation, cost reduction, and product and market positioning will continue as we work through this period of economic uncertainty."
 FLETCHER CHALLENGE CANADA LTD.
 Consolidated Supplemental Information
 (in millions of dollars)
 (unaudited)
 Three Months Ended
 Sept. 30,
 1992 1991
 Earnings
 Net Sales $207.0 $251.6
 Cost of products sold 187.9 227.0
 Depreciation, depletion &
 amortization 21.1 23.0
 Selling & administrative 15.5 16.9
 Total 224.5 266.9
 (17.5) (15.3)
 Earnings from associate
 companies before
 income taxes --- 0.6
 Operating loss (17.5) (14.7)
 Interest expense 11.2 14.8
 Gain on disposal of
 fixed assets 0.5 (0.1)
 Investment & other
 income (expense) (0.8) 3.7
 Loss before income taxes (29.0) (25.9)
 Income taxes (recovery) (10.2) (9.6)
 Net loss ($18.8) ($16.3)
 Net loss per weighted
 average common share
 (in dollars) ($0.24) ($0.27)
 Weighted average shares
 outstanding (000) 77,058 60,152
 Period ending shares
 outstanding (000) 77,058 60,186
 Other information
 Cash generated from
 (applied to) operations $2.2 ($29.9)
 Additions to fixed assets $3.4 $30.9
 Ratio of debt to equity 0.40 0.78
 Product shipments
 Newsprint - M tons 69 83
 Market kraft pulp
 - M tons(a) 61 84
 Lightweight coated paper
 - M short tons 119 101
 Lumber - MMBM 119 185
 (a) Excludes shipments to
 Blandin - M tons 9 13
 -0- 10/22/92
 /CONTACT: John Graf, VP-treasurer, 604-654-4383, or Stuart Clugston, director, public affairs, 604-654-4463, both of Fletcher Challenge Canada/
 (FCC.) CO: Fletcher Challenge Canada Ltd. ST: British Columbia IN: PAP SU: ERN


KJ -- LA031 -- 3850 10/22/92 16:47 EDT
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