Resolute Forest Q1 profit surges to US$210M on improved pricing, acquisitions

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MONTREAL — Resolute Forest Products Inc. is reporting stronger results in its latest quarter on gains in its pulp and paper sectors from improved pricing and the idling of a U.S. mill.

The forestry company, which keeps its books in U.S. dollars, says its net income attributed to shareholders was US$210 million or US$2.68 per diluted share in the first quarter, up from US$87 million or US$1.06 per share a year earlier.

Excluding special items, adjusted profits increased nearly 50 per cent to US$177 million or US$2.26 per share, compared with US$119 million or US$1.45 per share in the first quarter of 2021.

Resolute says its operating income reflected higher selling prices in all segments and the favourable impact of the indefinite idling of pulp and paper operations at the mill in Calhoun, Tenn. Wood segment operating profits were flat and tissue losses increased but the contribution from pulp increased and paper swung to a profit.

Revenues for the three months ended March 31 were US$945 million, up 8.2 per cent from US$873 million in the prior year quarter.

Resolute was expected to post US$984.5 million in revenues, according to financial data firm Refinitiv.

"We further strengthened the balance sheet with significant cash generation and improved the competitiveness of our business with two tuck-in acquisitions," stated CEO Remi Lalonde in a news release.

Lalonde added that its earnings and cash position reflect pricing momentum in all segments, but sales volumes were lower because transportation network improvements were slower than expected.

While the fundamentals for building materials are expected to remain positive, he warned that inflationary pressures and rising interest rates could hurt pricing and margins.

This report by The Canadian Press was first published May 5, 2022.

Companies in this story: (TSX:RFP)

The Canadian Press

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