Printer Friendly

FLETCHER CHALLENGE CANADA LIMITED ANNOUNCES EARNINGS

 VANCOUVER, British Columbia, July 26 /PRNewswire/ -- Fletcher Challenge Canada Ltd. today announced net earnings of $6.1 million, or 5 cents per common share, for the three months ended June 30, 1993. The results compare with a net loss of $20.1 million, or 30 cents per common share, for the same period last year.
 Sales for the quarter were $438 million, almost double the $226 million recorded for the same period in 1992. Sales from the Elk Falls pulp, paper and lumber complex, acquired by the company in February 1993, were the significant factor in the increase. Also contributing to the increase were improved prices for solid wood products and lightweight coated paper, higher pulp and paper shipments, and a favorable move in Canadian-U.S. dollar exchange rates.
 Cash flow from operations was $66.3 million for the quarter, an improvement of $85.1 million from the same quarter one year ago. The strengthened cash flow from operations, combined with minimal capital spending during the quarter, reduced the company's debt-to-equity ratio to 26:74, among the lowest in the Canadian forest products industry.
 Company President Doug Whitehead said strong wood products markets carried over from early in 1993 and were a significant factor in the positive earnings results. "Although North American lumber prices declined during the quarter from the record levels reached earlier in the year, they remained firm through the quarter in Japan, our primary offshore lumber market," he said.
 Shipments of lightweight coated paper from the company's U.S. subsidiary, Blandin Paper Co., were up over the same quarter one year ago, and prices have improved. Lightweight coated paper markets have strengthened over last year and a price increase is currently being implemented.
 Newsprint markets continue to improve slowly with the North American economy and prices were up modestly over last year.
 "Our Crofton and Elk Falls printing paper operations ran at capacity for the quarter," Whitehead said. "The development of recycled-content newsprint grades at Crofton and specialty paper grades at Elk Falls have been important factors in maintaining full operating rates.
 "We are now proceeding with a $15 million project that will enable us to further diversify our specialty product lines by converting Crofton's No. 2 paper machine to produce higher-value directory grades," he added.
 Pulp markets remain severely depressed and prices for the quarter were well below levels prevailing for the same period last year. A 17-day pulp production curtailment was taken at Crofton earlier in the year and a 15-day shutdown is scheduled at the Mackenize pulp mill for the current quarter as a result of the weak market conditions. Previously scheduled maintenance and capital work will be performed during the Mackenize shutdown.
 The company is continuing its cost reduction and efficiency improvement efforts, which helped to boost cash flow and earnings during the past year. At the same time, it is focusing on new product and market development Whitehead said.
 "While a sustained recovery has yet to emerge, our company remains well positioned to realize strong gains as markets gradually improve. In the case of pulp markets, however, no substantial improvement is expected before the end of 1993."
 For the year ended June 30, 1993, the company recorded a net loss of $24.2 million, or 26 cents per common share, on sales of $1.2 billion. This compares with a net loss of $43.5 million, or 70 cents per common share, for the corresponding period one year ago. Sales for the previous year were $957 million. The year earlier results included a non-recurring, after-tax gain of $35.3 million arising primarily from the sale of the company's interest in a Quebec forest products company. Excluding that gain from the previous year, the 1993 result represents at $54.6 million improvement from one year ago.
 Cash flow from operations was $107.3 million for the 12-month period, a $191.0 million turnaround from the year-earlier period. Capital spending at $31.9 million was down significantly from the previous year, reflecting completion of the company's major facility modernization and environmental upgrade.
 FLETCHER CHALLENGE CANADA LTD.
 Consolidated Supplemental Information
 (In millions of dollars) Unaudited
 3 Months Ended 12 Months Ended
 June 30, June 30,
 1993 1992 1993 1992
 Earnings
 Net sales $437.9 $225.9 $1,226.8 $957.3
 Cost of products sold 351.3 212.2 1,041.8 902.6
 Depreciation, depletion
 and amortization 37.4 22.1 112.9 92.0
 Selling and
 administration 21.7 11.7 62.1 49.3
 Total 410.4 246.0 1.216.8 1,043.9
 27.5 (20.1) 10.0 (86.6)
 Earnings from associate
 companies before income
 taxes --- --- --- 1.4
 Operating earnings (loss) 27.5 (20.1) 10.0 (85.2)
 Interest expense 12.6 13.3 48.3 61.3
 Gain on disposal of fixed
 assets and investments 1.2 0.1 5.2 58.2
 Investment and other
 income (expense) (1.1) (0.5) 3.2 3.1
 Earnings (loss) before
 income taxes 15.0 (33.8) (29.9) (85.2)
 Income taxes (recovery) 8.9 (13.7) ( 5.7) (41.7)
 Net earnings (loss) $6.1 ($20.1) ($24.2) ($43.5)
 Net earnings (loss) per
 weighted average common
 share (in dollars)
 (see note) $0.05 ($0.30) ($0.26) ($0.70)
 Period ending shares
 outstanding (000)
 (see note) 90,730 77,058
 Note: As partial consideration for the acquisition of the Elk Falls operations, a subsidiary of the company issued preferred shares which contain a right of exchange into 31,578,947 common shares of the company. The common share equivalent of these preferred shares has been included in the per share calculation.
 Other Information:
 Cash generated from
 (applied to) operations $66.3 ($18.8) $107.3 ($83.7)
 Additions to fixed assets $9.4 $6.4 $31.9 $78.4
 Total assets $2,770.4 $1,866.1
 Long-term debt (including retractable
 preferred shares issued by subsidiary) $637.7 $413.7
 Ratio of debt to equity (equity includes
 exchangeable preferred shares issued by
 subsidiary) 26:74 28:72
 3 Months Ended 12 Months Ended
 June 30, June 30,
 1993 1992 1993 1992
 Product Shipments:
 Groundwood printing papers
 - M tonnes 236 102 583 345
 Market kraft pulp
 - M tonnes (1) 151 84 407 357
 Kraft paper - M tonnes 25 --- 33 ---
 Lightweight coated paper
 - M short tons 111 97 439 400
 Lumber - MMBM 164 157 607 679
 (1) excludes shipments to
 Blandin - M tonnes 22 15 73 63
 -0- 7/26/93
 /EDITOR'S NOTE: Fletcher Challenge Canada Ltd. has a June 30 fiscal year end. This news release reports the results of the Company's fourth quarter./
 /CONTACT: J.K. Graf, VP, treasurer, 604-654-4383, or S.H. Clugston, communication management, 604-654-4463, both of Fletcher Challenge Canada/
 (FCC.A.)


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

LS -- LA037 -- 5964 07/26/93 19:19 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 26, 1993
Words:1151
Previous Article:HALLIBURTON ENERGY SERVICES NAMES KILPATRICK VICE PRESIDENT
Next Article:FUJISAWA USA, INC. WILL CONTINUE TO DEFEND ITS ADENOSCAN AGREEMENT WITH MEDCO RESEARCH, INC.
Topics:


Related Articles
FLETCHER CHALLENGE CANADA ANNOUNCED RETIREMENT
FLETCHER CHALLENGE CANADA REPORTS RESULTS
FLETCHER CHALLENGE CANADA ANNOUNCES MOVE OF PRESIDENT
FLETCHER CHALLENGE CANADA LTD. ANNOUNCES RESULTS
FLETCHER CHALLENGE CANADA LTD. ANNOUNCES LOSS
FLETCHER CHALLENGE CANADA LTD. TO ACQUIRE ASSETS OF CROWN FOREST INDUSTRIES LTD.
FLETCHER CHALLENGE CANADA COMPLETES ACQUISITION OF CROWN FOREST ASSETS
Fletcher Challenge US$300 Million Commercial Paper Program Rated A-2
Sale of Fletcher Challenge Canada Control Block to Norske Skog.
Control block in Fletcher Challenge Canada transfers to Norway's Norske Skog following parent company's sale of its paper division.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters