Domtar Corp.'s Pulp Shipments Soared 12%

SEATTLE (Scrap Monster):  Domtar Corporation announced preliminary financial report for Q3 2019. The company reported improved Paper Segment results, mainly due to lower maintenance and raw material costs.

The company reported net earnings of $20 million or $0.32 per share for the quarter. This compares with the net earnings of $99 million or $1.57 per share during the similar quarter a year before. The third quarter sales totalled $1.3 billion. The operating income declined from $34 million in Q2 to $29 million in Q3 this year.

The Pulp segment witnessed downward price adjustments in most regions. However, Domtar sees signs of improvement in supply and demand fundamentals. The margins and EBITDA of Personal Care segment was one of the best in several quarters.

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In comparison with the prior quarter, the manufactured paper shipments declined marginally by 1% in Q3 this year. At the same time, quarterly pulp shipments surged higher significantly by 12%. Domtar’s paper and pulp inventories witnessed declines by 19,000 tons and 9,000 tons respectively, compared to Q2 2019.

Domtar’s Q3 financial report foresees higher maintenance costs in the fourth quarter of the current year. The seasonally unfavourable mix is likely to impact Paper segment results. The company expects volatility in softwood and fluff pulp markets. Higher sales coupled with positive impacts resulting from margin improvement plan are expected to benefit Personal Care segment.