Nov 03, 2010. /Lesprom Network/. Catalyst Paper posted net earnings of $6 million on sales of C$322.3 million during the 3Q 2010. This contrasts with a net loss of C$368.4 million on sales of C$299.4 million in the prior quarter. While 2Q results were significantly impacted by impairment, severances and other closure costs of C$302 million, improvement in the most recent quarter also reflects better paper market conditions and operational performance, company said in a statement received by Lesprom Network. Before specific items, Catalyst recorded a net loss of C$9.6 million, improved from a net loss before specific items of C$43.9 million in the 2Q. Specific items in the 3Q included a foreign exchange gain of C$16.3 million on the translation of U.S. dollar denominated debt. EBITDA in the 3Q was C$34.2 million and EBITDA before specific items was C$34.5 million, in contrast to negative C$0.4 million and positive C$10.5 million respectively in the 2Q "Business conditions are tough but showing signs of improvement," said President and CEO Kevin J. Clarke. "Sales volumes and prices were up as North American paper demand stabilized. Our mills and machines ran well enabling us to get the most out of the modest market recovery. And we're beginning to realize the fixed cost savings from the permanent closures of the Elk Falls and Paper Recycling facilities. In addition, we made significant progress in expanding existing customer commitments and have successfully sold into new markets." Further improvement in benchmark prices across all Catalyst paper products is expected in the 4Q with directory improvements taking effect with new contracts in 2011. Pulp prices, in contrast, are expected to decrease as Chinese demand weakens. Production curtailment is expected to be contained to the Crofton # 1 newsprint machine; however, rising input costs and the strong Canadian dollar will continue to put adverse pressure on results in the current and future quarters. Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 2 million tonnes.