Fraser reports $5 million 3Q loss

Blaming falling lumber and pulp prices, Fraser Papers has reported losing $5 million for the second consecutive quarter.

For the third quarter of 2005 ending Oct 1, Fraser lost $5 million or 16 cents per share compared to earnings of $2 million for the third quarter of 2004.

“Our overall financial results are far from satisfactory,” said Dominic Gammiero, Fraser president and CEO.

Gammiero said, however, that, “operationally, our performance improved which allowed us to partly mitigate the impact of falling lumber and pulp prices and maintenance downtime. Our strong balance sheet remains a critical asset for Fraser papers as industry conditions remain challenging. The sale of our paperboard operations subsequent to quarter end is an indication of our ongoing commitment to rationalize our asset base and exit unprofitable businesses,” Gammiero said.

The company described the current environment for the paper industry as challenging. Increases in fiber and energy costs as well as the strength of the Canadian dollar are not reflected in higher paper prices.

The company reported that so far this year its costs have increased by $38 million, or more than 5 per cent of its total cost base. On the other hand, prices for uncoated free sheet paper and lumber dropped.

The company said it has continued to focus on repositioning its asset base and improving its product mix. — NHBR STAFF