Resolute Reports Preliminary Q1 2013 Segment Breakdowns

Specialty Papers
Operating income increased by $1 million, to $9 million, in the quarter. Shipments were down 10 percent, reflecting seasonality and market conditions. During the fourth quarter, the company implemented asset optimization initiatives, closing two machines and restarting the lower-cost Dolbeau, Quebec, facility. Operating costs in the segment improved by $14 per short ton as the Dolbeau mill, including its cogeneration facility, reached full production and the company made efficiency improvements at its Laurentide, Quebec, mill. Costs were unfavorably affected by higher steam costs from higher natural gas prices and seasonally higher consumption. Average transaction price was down $8 per short ton in the quarter.

Market Pulp
Operating loss in the market pulp segment was $4 million in the first quarter, compared to breakeven in the previous quarter. Average transaction price rose $7 per metric ton, but shipments were down 2 percent, due mainly to the annual outage at the Catawba mill. Operating cost per unit were $19 per metric ton higher, due to the annual outage at Catawba, higher wood costs in the U.S. southeast due to heavy rain and higher steam and chemical costs. Cost performance at the Saint-Felicien, Quebec, mill improved significantly following the costly catch-up maintenance and environmental work during the third and fourth quarters of 2012.

Wood Products
The wood products segment generated operating income of $16 million during the quarter, up $2 million from the fourth quarter. Average transaction price improved $36 per thousand board feet, but shipments were down 3 percent as a result of limited rail car availability. Operating costs per thousand board feet were 8 percent higher in the quarter because of higher wood costs—mainly increases in stumpage fees, which are linked to lumber selling prices—lower wood chip selling prices and a $4 million favorable inventory adjustment in the fourth quarter.