Fibre costs, loonie drop Cascades to first-quarter net loss of $4 million
- Tissue and cardboard maker Cascades Inc. (TSX:CAS) reported a first-quarter net loss of $4 million, reversing a year-ago $22-million profit as the company was hit by high fibre costs, a strong Canadian dollar and challenging business conditions in the company's boxboard and tissue paper sectors.
The Quebec company said Thursday it lost four cents a share for the three months ended March 31. That compared with net earnings of $22 million or 22 cents a share for the same period in 2007.
When excluding specific items, the net loss for the quarter amounted to $9 million, compared with earnings of $5 million last year.
Sales fell to $959 million from $1 billion.
"Market conditions continued to deteriorate as the cost of recycled paper and energy increased while in Canada, demand weakened in some of our groups," said Alain Lemaire, president and CEO of the company.
"Of all of our business sectors boxboard continues to be the most challenged. The decision to integrate the North American boxboard and folding carton operations into Norampac represents a further step in our ongoing efforts to improve profitability. We are convinced this move will create a stronger packaging group that will be better able to respond to the needs of the market.
"Our other business groups have also moved decisively to address under performing assets, the sale of Greenfield SAS being the most recent example. We are confident these efforts will make Cascades a more profitable company that is better positioned to meet the challenges of the future."
Looking ahead, Lemaire said "we expect a seasonal pickup in activity in most of our business segments which when combined with better overall selling prices and the recent drop in fibre costs should positively impact our second quarter results."
Founded in 1964, Cascades produces, transforms and markets packaging and tissue mainly from recycled fibres. The company employs close to 14,000 employees at operations in Canada, the United States and Europe. Its Norampac unit is Canada's largest carboard maker.
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