Domtar Corporation reported net earnings of $71 million ($1.10 per share) for the fourth quarter of 2014 compared to net earnings of $281 million ($4.33 per share) for the third quarter of 2014 and net earnings of $65 million ($1.00 per share) for the fourth quarter of 2013. Sales for the fourth quarter of 2014 were $1.4 billion.
Excluding items listed below, the Company had earnings before items1 of $91 million ($1.41 per share) for the fourth quarter of 2014 compared to earnings before items1 of $61 million ($0.94 per share) for the third quarter of 2014 and earnings before items1 of $68 million ($1.05 per share) for the fourth quarter of 2013.
Fourth quarter 2014 items:
– Closure and restructuring costs for $25 million ($18 million after tax); and
– Impairment of property, plant & equipment of $4 million ($2 million after tax).
Third quarter 2014 items:
– Deferred tax benefit of $204 million for the settlement of IRS audit, primarily related to Alternative Fuel Tax Credits;
– Recognition of $18 million of Alternative Fuel Tax Credits ($18 million after tax); and
– Closure and restructuring costs of $2 million ($2 million after tax).
Fourth quarter 2013 items:
– Net gain on sale of property, plant and equipment and business for $5 million ($4 million
after tax); and
– Charge of $7 million ($7 million after tax) for impairment of property, plant and equipment.
Fiscal Year 2014 Highlights
For fiscal year 2014, net earnings amounted to $431 million ($6.64 per share) compared to net earnings of $91 million ($1.36 per share) for fiscal year 2013. The Company had earnings before items1 of $234 million ($3.61 per share) for fiscal 2014 compared to earnings before items1 of $158 million ($2.37 per share) for fiscal 2013. Sales amounted to $5.6 billion for fiscal year 2014.
Commenting on the full-year results, John D. Williams, President and Chief Executive Officer, said, “Looking back at 2014, we delivered a year of strong results with solid free cash flow generation. Overall, we had good operating performance despite lack-of-order downtime in paper and we continued to adjust to rapidly changing market conditions. We also turned an important corner on our journey to build a growing, fiber-based business through acquisitions, strategic investments in manufacturing capacity and the additional repurposing of existing assets. We ended the year with strengthened earnings potential for the long-term.”
Operating income before items1 was $115 million in the fourth quarter of 2014 compared to an operating income before items1 of $104 million in the third quarter of 2014. Depreciation and amortization totaled $93 million in the fourth quarter of 2014. Commenting on the fourth quarter results, Mr. Williams said, “In the fourth quarter, our results were strong despite a competitive paper market environment while pulp benefitted from good operating performance. During the quarter, we announced a fluff pulp conversion project that will further expand our presence in a growing business and help balance our paper supply with our customers’ demand.”
Mr. Williams added, “In Personal Care, our European business continued to perform well, posting a record sales performance but we did face some challenges in the U.S. market in addition to an extended ramp-up period. Momentum in the business is growing and we now have a state-of-the-art, low-cost, global manufacturing platform designed to provide our customers with differentiated product solutions to help them win in their markets.”
In the picture: John D. Williams, President and Chief Executive Officer of Domtar.