Fortress Paper ends tough year with $54.7-million loss in fourth quarter

VANCOUVER – Fortress Paper Ltd. (TSX:FTP) posted a $54.7-million loss in the fourth quarter as it wrote down the value of property, plant and equipment at a Quebec cellulose mill that has been hit by weakened demand and the threat of high Chinese import duties.

The loss amounted to $3.76 per share for the three months ended Dec. 31. That brought the full-year loss for the Vancouver-based company to $107.8 million, including discontinued operations.

Fortress makes various types of paper and fibre, or pulp. It has divested its specialty papers segment, which is listed as a discontinued operations.

The company announced late Monday that it recorded a $32.9 million item in the fourth quarter to reflect the reduced value of property, plant and equipment its Fortress Global Cellulose mill in Lebel-sur-Quevillon, Que.

In November, China said it will likely impose a 50.9 per cent interim duty on dissolving pulp from the FGC mill if it converted to that purpose. China also imposed a 13 per cent interim duty on dissolving pulp from the Fortress Specialty Cellulose mill in Thuro, Que.

During the quarter , Fortress also wrote down the fair market value of inventories by $3.7 million.

Excluding certain items, Fortress had an adjusted net loss of $21.2 million or $1.46 per share in the quarter, compared with a loss of $11.2 million or 77 cents per share a year earlier. Its revenue dropped to $37.2 million from $58.7 million a year before.

For the full year, Fortress had sales totalling $207.8 million, up from $163.9 million in 2012.

It had $54.5 million in net income last year, including $162.4 million from discontinued operations, compared with a $21.7 million loss in 2012, including $20.7 million of net income from discontinued items.

“The 2013 year proved to be very challenging for Fortress Paper. Positive developments throughout the year were overshadowed by the disappointing financial results from the Dissolving Pulp Segment,” said Chadwick Wasilenkoff, chief executive officer of Fortress Paper.

“As we enter 2014, we believe that we are making progress on numerous initiatives and are confident that we are on the right track to overcome remaining obstacles.”