Catalyst Paper’s (TSX:CTL) stock value dropped nearly 9% to $0.41 per share Thursday, hours after the company announced a $397 million net loss for 2010.
The Richmond-based pulp and paper company announced its 2010 financial results Wednesday evening, posting total sales of $1.228 billion for the year compared with $1.223 billion in 2009.
The company’s loss for the year was significantly more than its $4.4 million net loss in 2009, though $304.2 million of the 2010 loss was largely due to costs associated with the closure of its Elk Falls paper mill and Paper Recycling division.
“We didn’t end the year quite where we wanted to be, but our results are showing momentum on a few fronts,” president and CEO Kevin Clarke said during a conference call Thursday. “That said, we’re taking the right steps.”
He highlighted stronger financial results for Catalyst in the fourth quarter of 2010, pointing to net earnings of $9.6 million for the period compared with $6 million in the third quarter and a $35.8 million loss in 2009’s fourth quarter.
Clarke said lower inventories and higher operating rates globally increased commodity prices for the company in the fourth quarter.
At the end of 2010, Catalyst had $189.4 million in liquidity, roughly split between cash and an asset-based loan.
Still, the company isn’t out of the woods yet.
Clarke, who joined the company last June, believes pulp markets will remain strong in the first half of 2011 but the remainder of the year is uncertain.
“I came aboard at the halfway point of the year, and there’s no question business conditions have been as tough as any I’ve seen in my 30 years in the print industry,” he said.
“Experience says that cost-cutting alone won’t get Catalyst where we need to be long term, so we’re pulling all of the levers in our control – sales, our mill performance, changing our business culture, addressing costs and looking at our balance sheet.”
The news follows the announcement yesterday that Catalyst will receive $18 million from the government’s Pulp and Paper Green Transformation Program (see “Government protects jobs in Canada’s forest sector ” – BIV Business Today, March 2.)