Montreal. Bowater Inc., hit by weak newsprint, fine-paper and lumber markets, yesterday reported a heavy third-quarter loss and said it cut its workforce by 3% in a new wave of cost-cutting. And Arnold Nemirow, the company's chief executive, warned the fourth quarter will show a heavier-than-expected net loss - despite slightly higher prices for pulp and newsprint. The big South Carolina-based forest products group, with mills in Ontario, Quebec, New Brunswick and Nova Scotia, had a net loss of US$32.3-million, or US57c a share, against a loss of US$1.8-million (4c) a year earlier. Excluding special items, the loss was US80c a share. Sales were US$644-million, up 15% from US$559-million. The higher revenue reflects the takeover of Canada's Alliance Forest Products Inc. Mr. Nemirow said the fourth-quarter loss will be US70c to US80c a share, excluding restructuring charges. On the same basis, analysts surveyed by Thomson/First Call had been expecting a loss of US54c. Like the rest of the industry, Bowater has been closing machines and reducing payroll for the past year as newsprint inventories soared. "The slow U.S. economic recovery calls for even more aggressive action," Mr. Nemirow said. "Offshore prices, especially in Southeast Asia, have weakened and our Korean sales were hit by a labour dispute." Bowater plans to get US$75-million of savings from the new cost-cutting program, including rationalization of production in its U.S. and Canadian mills. It will take 100,000 tonnes of downtime in the current quarter, against 123,000 tonnes in the third quarter. It wants to sell another 100,000 acres of U.S. timberlands; last January it sold 147,000 acres to Wachovia Corp. "Besides a strike in Korea, the company faces higher power costs in Canada and gloom in coated paper markets," said Mark Wilde, analyst with Deutsche Bank Securities in New York Bowater shares have fallen more than 20% this year. Yesterday they were down $2.32 at $57.21 in Toronto.