Bowater 1Q 2007 net loss widened to $35.4 million on lower demand

Apr 26, 2007. /Lesprom Network/. Bowater Incorporated reported on April 26 a net loss for the first quarter of 2007 of $35.4 million, or $0.62 per diluted share, on sales of $771.6 million. These results compare with a net loss of $18.8 million, or $0.33 per diluted share, on sales of $893.2 million for the first quarter of 2006. "The continued decline in newsprint consumption and seasonally slow coated paper demand, along with weak lumber markets, led to price declines during the quarter," said David J. Paterson, chairman, president and chief executive officer. "We also experienced considerable cost pressures as a result of the rapid increase in the cost of recycled fiber and the impact of production curtailments. We have seen some improvement in the second quarter with better demand for several of our paper grades and softening in the cost of recycled fiber." First quarter 2007 special items, net of tax, consisted of the following items: a $35.9 million gain related to asset sales, a $12.3 million charge related to tax adjustments, a $3.4 million loss relating to foreign currency changes, and a $7.0 million charge for severance and merger-related costs. Excluding these special items, the net loss for the quarter would have been $48.6 million, or $0.85 per diluted share, compared with first quarter 2006 net loss before special items of $19.1 million, or $0.33 per diluted share. Bowater Incorporated, headquartered in Greenville, South Carolina, is a leading producer of coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater employs approximately 7 000 people and has 12 pulp and paper mills in the United States, Canada and South Korea. In North America, it also operates a converting facility and owns 10 sawmills. Bowater's operations are supported by approximately 763 000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange.