Oct 30, 2006. /Lesprom Network/. Fraser Papers achieved breakeven EBITDA for the third quarter ended September 30, 2006 compared with negative $1 million in the same period of 2005, an improvement of $3 million after adjusting for the results from the company's previously owned timberland operations. On a year-to-date basis, EBITDA of negative $7 million was recorded, compared to EBITDA of $11 million recorded in 2005. The 2006 results included EBITDA of $2 million from the company's timber operations, compared to $10 million in 2005. The company completed the sale of its timber operations in the first quarter of 2006. For the third quarter ended September 30, 2006, Fraser Papers reported a loss of $6 million or $0.21 per share compared to a loss of $5 million or $0.16 per share in the third quarter of 2005. The quarterly loss represents a $12 million improvement over the second quarter of 2006 when the company took 17 days of maintenance related downtime at its pulp mill in Edmundston, New Brunswick. On a year-to-date basis, the company generated a net loss of $102 million, or $3.46 per share versus $7 million or $0.23 per share in 2005. 2006 results include charges of $157 million related to investment write-offs and plant closures, offset by a gain of $71 million on the sale of the company's timberland operations in New Brunswick. In 2005, the company recorded a $46 million gain on the sale of its timberland operations in Maine and a $41 million asset impairment charge. "During the period, we realized higher prices across all paper grades, and our operations performed better following extensive maintenance downtime in the second quarter. Results from our pulp operations improved as well, benefiting from the internal rationalization of our hardwood pulp capacity and higher market prices. Despite this, we haven't made the kind of progress we need to, in part because of a weak lumber market, but largely because we have not yet captured the full potential from our existing asset base. As we look ahead, we need to achieve better operating performance in all our operations," said Dominic Gammiero, president and CEO of Fraser Papers. Outlook North American paper prices increased strongly during the first three quarters of 2006, but momentum appears to be slowing as the impact of previously announced capacity reductions have been absorbed by the market. On a seasonal basis, the fourth quarter also tends to have lower demand particularly around the year-end period. However, Fraser Papers expects to benefit from announced price increases in its specialty printing and packaging grades which become effective over the fourth quarter and the beginning of the first quarter of 2007. The Company has scheduled a seven day shutdown at its cogeneration facility in Edmundston, New Brunswick during the fourth quarter, which is expected to impact operating costs by $2 million during the quarter as a result of additional maintenance costs and higher oil usage. Improved operating performance at the paper operations of the East Papers complex remains a priority and is expected to partially offset these costs during the upcoming quarter. In October, a number of South American eucalyptus pulp producers announced price increases for the fourth quarter as a result of strong global demand for hardwood pulp. If successful, these price announcements should support firm pricing for northern bleached hardwood kraft pulp into 2007. The pulp mill in Thurso, Quebec is currently shutdown for annual maintenance and will restart during the week of November 6, 2006. The impact of this shutdown on fourth quarter results is forecast to be $4 million. Lumber markets are expected to remain weak in the near future due to slower construction activity in the United States and adequate supply. Should prices not improve, it is anticipated that the current closures in effect at the Company's two Canadian sawmills will have to be extended during the fourth quarter. With significant sawmill closures elsewhere in eastern Canada, the Company is closely monitoring the availability and price of sawmill chips used for the production of sulphite pulp at its Edmundston mill. Fraser Papers is an integrated specialty paper company which produces a broad range of technical and printing & writing papers. The company has operations in New Brunswick, Maine, New Hampshire and Quebec. Fraser Papers is listed on the Toronto Stock Exchange.