Improved first quarter results; accelerating COVID-19 response plan
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted).
- First quarter 2020 net earnings of $0.09 per share
- Record quarter sales and EBITDA in Personal Care
- Several measures taken in response to COVID-19
- Suspension of quarterly dividends and share repurchase program
FORT MILL, S.C.–May 8, 2020– Domtar Corporation (NYSE: UFS) (TSX: UFS) today reported net earnings of $5 million ($0.09 per share) for the first quarter of 2020 compared to a net loss of $34 million ($0.59 per share) for the fourth quarter of 2019 and net earnings of $80 million ($1.27 per share) for the first quarter of 2019. Sales for the first quarter of 2020 were $1.3 billion.
Excluding items listed below, the Company had earnings before items1 of $5 million ($0.09 per share) for the first quarter of 2020 compared to earnings before items1 of $2 million ($0.03 per share) for the fourth quarter of 2019 and earnings before items1 of $91 million ($1.44 per share) for the first quarter of 2019.
“As the global community reacts to COVID-19 and the large-scale effort to contain it continues, we remain focused on navigating the crisis, keeping our employees and their families safe, serving our customers as an essential business, and protecting our financial stability. We are taking steps to reduce spending to further strengthen our balance sheet, liquidity and cash flow while seeking to ensure we are well positioned when the economy starts moving again”, said John D. Williams, President and Chief Executive Officer.
“Despite our paper volumes increasing in Q1, we experienced a significant reduction of orders in April due to the COVID crisis and the resulting lockdown of schools, offices, retailers and other business sectors. As a result, we are taking the appropriate steps to optimize our operations and to remain an agile, reliable partner to our customers. We continue to closely monitor customer orders and backlogs, and will adjust capacity accordingly, but we anticipate inventory to be at appropriate levels as a result of our recently-announced capacity reduction plan,” said Mr. Williams. “Our pulp shipments were stable in Q1 despite some logistical challenges and a major shutdown of operations in China due to COVID-19. We did see good demand from our North American tissue customers, and we expect overall demand for pulp in the second quarter to remain strong, particularly in China as they continue to reopen their economy.”
Commenting on Personal Care, Mr. Williams added, “We had a record sales and EBITDA quarter. Our sales line in Q1 benefited from consumer pantry loading in preparation for in-home quarantine and the scale-up of new customer wins. We continue to increase operating rates, and we have established rapid response teams to maximize productivity to support an uptick in demand, inventory replenishment and portfolio simplification.”