Resolute Forest Products Inc. reported net income for the 2Q 2022 of $256 million, or $3.29 per diluted share, compared to net income of $268 million, or $3.34 per diluted share, in the same period in 2021.

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Resolute Forest Products reports 2Q net income of $256 million

Resolute Forest Products reports 2Q net income of $256 million

Bild: Resolute Forest Products

Resolute Forest Products Inc. reported net income for the 2Q 2022 of $256 million, or $3.29 per diluted share, compared to net income of $268 million, or $3.34 per diluted share, in the same period in 2021.

Sales were $1,058 million in the 2Q 2022, a decrease of $82 million from the year-ago period. Excluding special items, the company reported net income of $155 million, or $2.00 per diluted share, compared to net income of $300 million, or $3.74 per diluted share, in the 2Q 2021.

The $217 million of operating income reported in the 2Q 2022 was $189 million lower than the comparable quarter of 2021. The variance includes higher selling prices for the pulp, paper and tissue segments ($108 million), more than offset by lower selling prices for wood ($157 million) and lower shipments as a result of logistics constraints ($17 million). The company faced higher manufacturing costs ($104 million), mainly related to fiber costs ($42 million), maintenance, labor and outside service costs ($31 million) and energy prices ($25 million), as well as higher freight costs ($25 million).  It also benefitted from a lower Canadian dollar ($8 million).

Wood Products

The wood products segment generated operating income of $180 million in the quarter, $39 million lower than the previous quarter. The average transaction price fell to $931 per thousand board feet, a decrease of $91 per thousand board feet, or 9%, reflecting lower benchmark lumber prices, despite the positive impact of consolidating engineered wood products in the segment's sales following the acquisition of the remaining 50% equity interest in Resolute-LP Engineered Wood Larouche Inc. and Resolute-LP Engineered Wood St-Prime Limited Partnership. Shipments rose by 65 million board feet, but finished goods inventory increased by 16 million board feet, to 239 million board feet, reflecting continued challenges with rail car availability. The operating cost per unit (or, "delivered cost") rose by $43 per thousand board feet, or 8%, mainly reflecting higher log costs due to stumpage fees and fuel price. EBITDA in the segment slipped by $39 million, to $191 million.

Market Pulp

Operating income in the market pulp segment was $41 million in the second quarter, $19 million higher than in the prior quarter. The average transaction price increased by $117 per metric ton, or 14%, due to stronger market conditions. Shipments were 29,000 metric tons higher, helping to reduce finished goods inventory by 14,000 metric tons to 68,000 metric tons at quarter-end. The delivered cost rose by $42 per metric ton, mainly due to higher maintenance and fiber costs. EBITDA in the segment improved by $22 million, to $48 million.

Tissue

The tissue segment incurred an operating loss of $9 million in the quarter, in line with the first quarter. The average transaction price increased by $84 per short ton, or 4%, on rising market pricing. Shipments were 1,000 short tons higher and finished goods inventory fell by 2,000 short tons. The delivered cost increased by $126 per short ton, or 6%, mostly due to higher market pulp prices. EBITDA in the segment fell by $1 million, to negative $5 million.

Paper

The paper segment recorded operating income of $37 million in the quarter, an improvement of $12 million over the previous quarter. The average transaction price rose by $35 per metric ton, or 5%, due to stronger market conditions in all grades. Shipments rose by 29,000 metric tons, helping to reduce finished goods inventory by 18,000 metric tons to 67,000 metric tons at quarter-end. The delivered cost increased by $11 per metric ton, or 2%, mainly due to higher freight and maintenance costs. EBITDA improved by $13 million, to $47 million.

Resolute Forest Products is a global leader in the forest products industry with a diverse range of products.