Resolute Forest cuts US newsprint capacity
Shutting Georgia machine permanently, cites vulnerability to strong US dollar.
MONTREAL — Resolute Forest Products says it’s permanently shutting down one of its US newsprint machines in response to ongoing challenges in the market.
The Montreal-based pulp, paper and lumber producer says its US mills are “especially vulnerable” in the present currency environment, when a strong American dollar weakens their competitive position.
Resolute recently announced price increases to its newsprint sales in the US but doesn’t expect long-term demand to improve, unlike an anticipated recovery in demand for lumber for the US housing market.
The company says it anticipates a $20 million expense item will be recorded for the machine shutdown at its newsprint mill in Augusta, Ga., which will be recorded in the second and third quarters of 2016.
It also announced a loss of US$8 million, or nine cents per share, in the first quarter ended March 31. – an improvement from a loss of US$33 million or 35 cents per share in the first quarter of 2015. Sales fell to $877 million from $920 million, but the impact was offset by the positive impact of a weak Canadian dollar and lower expenses.
Excluding special items, Resolute had an $18 million loss in the first quarter or 20 cents per share – little-changed from a year earlier.
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