Fortress Paper announces second quarter results
Fortress Paper Ltd. reported 2012 second quarter EBITDA of $2.3 million.
For the first quarter of 2012, EBITDA loss was $1.8 million and for the second quarter of 2011, EBITDA was $4.6 million.
Excluding corporate costs, the three business segments' combined EBITDA was $3.6 million in the 3 months ended June 30, 2012. The Specialty Papers Segment contributed $10.5 million EBITDA while the Dissolving Pulp Segment and the Security Paper Products Segment generated EBITDA losses of $0.7 million and $6.2 million, respectively. Corporate costs contributed to EBITDA loss in the amount of $1.3 million.
Net income for the second quarter of 2012 was $12.5 million or basic and diluted net income of $0.87 per share. In the prior quarter net loss was $10.5 million or diluted loss per share of $0.73. In the prior year comparative period, net income was $2.9 million or diluted net income per share of $0.19. The much improved current period result was primarily due to the gain realized on the sale of certain non-core assets in the Security Paper Products Segment (see "Management's Outlook").
Production of dissolving pulp commenced in early December 2011. Commercial production for accounting purposes, with the equipment operating as intended by management, began on March 18, 2012. After such date all sales and cost of sales have been included in the operating results. The Dissolving Pulp Segment improved operating results gradually throughout the quarter.
The Specialty Papers Segment continued its strong performance in the second quarter. Margins remain strong and the order log is healthy. Contributing to the positive results were continued production efficiency, relatively lower pulp prices, full utilization of the Company's new dry waste plant and strong sales tonnage and realized prices.
The Security Paper Products Segment experienced another difficult quarter. Unfortunately, the continued postponement of several major currencies has resulted in optimization challenges due to low volumes. As announced in June 2012, Landqart had a material banknote order reinstated, the benefits of which are expected to be realized in the second half of 2012 at the earliest. Although the Company continues to pursue opportunities with other customers, there can be no assurance that new orders will be secured nor certainty as to when or whether all remaining postponed orders will be reinstated.