Resolute Forest Products Inc. reported net income for the 3Q ended September 30, 2020, of $57 million, or $0.66 per diluted share, compared to a net loss of $43 million, or $0.47 per share, in the same period in 2019. Sales were $730 million in the quarter, an increase of $25 million from the year-ago period. Excluding special items, the company reported net income of $62 million, or $0.72 per diluted share, compared to a net loss of $34 million, or $0.37 per share, in the 3Q 2019.
The company reported operating income of $97 million in the 3Q 2020, compared to an operating loss of $18 million in the 3Q 2019. The $115 million increase reflects the favorable impact of higher selling prices for wood products ($104 million), contribution from the recently-acquired U.S. sawmills ($26 million), lower maintenance costs ($22 million), and the weaker Canadian dollar ($8 million).
These items were partly offset by the effects of lower selling prices and fewer shipments in the market pulp and paper segments ($52 million) due to softer market conditions. Adjusted EBITDA of $140 million was $117 million higher than the 3Q 2019.
"We took advantage of the rally in lumber prices to further deleverage the balance sheet and drive shareholder value by opportunistically repurchasing 5% of outstanding shares," said Yves Laflamme, president and CEO. "While the pulp and paper segments continue to suffer from pandemic economics, we used part of the cash we generated with our lumber business to fully repay all revolving borrowings under our credit facilities, except for the low-interest term loan used to finance the acquisition of the U.S. sawmills, which have generated $38 million of EBITDA under our ownership this year."
Source: Lesprom Network