Resolute Forest Products reports Q4 loss, but big overall gains in 2021
By CFI staff
By CFI staff
Higher costs in late 2021 led Resolute Forest Products to report losses in the fourth quarter, but the overall picture in 2021 was positive, the company reports.
Resolute saw a GAAP net income of $307 million compared to $10 million in 2020 and sales were $3.7 billion, up 31 per cent from the previous year. Excluding special items, the company reported net income of $523 million compared to $56 million in 2020.
“The $921 million of adjusted EBITDA generated in 2021 allowed us to reduce our debt, invest in our business and return cash to shareholders,” said Remi G. Lalonde, Resolute’s president and chief executive officer.
“Our fourth quarter results reflect higher realized prices across most of our segments, especially wood products, but also cost pressures across the business. We faced higher manufacturing costs, mainly due to higher energy prices, lower internal power generation and higher fibre costs, as well as higher freight costs and a mark-to-market of share-based awards following a stock price appreciation of roughly 30 per cent in Q4. Rising interest rates helped to reduce our net pension and OPEB deficit by over $400 million this year, further strengthening our balance sheet and credit profile.
“We also recently amended and extended our ABL credit facility, which includes an ESG module, one of the first examples in the forest products industry. Looking back on the year, I am particularly proud of our employees for setting a new bar on safety, with an annual OSHA incident rate of 0.47. Our long-term ambition is to continue to improve until we reach 0 injury, but this is an impressive success along the way – despite the pandemic and other challenges – and I wholeheartedly applaud our employees for our achievement,” added Lalonde.
Read the company’s full Q4 and end of year report here.