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Fortress cuts Q4 loss by more than half

The Vancouver-based pulp and paper producer reported Monday evening that it lost 27 cents per share for the period ended Dec. 31, compared to a loss of 64 cents per share, or $9.2 million a year earlier.

Adjusting for foreign exchange fluctuations, Fortress Paper (TSX:FTP) lost $5.2 million or 36 cents per share, compared to a loss of $6.3 million or 44 cents per share in the prior year.

Revenues increased to $96.1 million from $49.5 million in the year-ago period as it shipped 16.4 million tonnes of paper and nearly 47 million tonnes of pulp, up from 13 million and 8.2 million respectively a year earlier.

The Fortress specialty cellulose mill in Quebec began production of dissolving pulp in early December 2011. The mill has encountered various conversion issues and the impact of production on operating results will only begin this month.

Fortress said its co-generation project at the mill is nearing completion, with engineering and procurement completed and overall construction in the final stages. It expects power will begin to be delivered early in the second quarter with costs increasing by 10 to 20 per cent.

The specialty papers segment had a strong performance in the fourth quarter and achieved record results in the 2012 fiscal year. The company believes market demand will continue to be strong in the coming years as the displacement of traditional paper-based wallpaper with non-woven wallpaper base appears to be progressing faster than originally anticipated.

The security paper products segment experienced another difficult quarter as overcapacity in the banknote paper market continued to erode prices and margins in 2012.

For the full year, Fortress lost $20.9 million or $1.45 per share, compared to a loss of $19.2 million or $1.37 per share. On an adjusted basis, it lost $37.4 million or $2.60 per share, up from a loss of $20.6 million or $1.47 per share.

Sales increased to $314.4 million from $308.9 million in 2011.