To read the Fortress Paper press release, please click here.
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Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) in connection with the release of second quarter results, will host a conference call Wednesday, August 8th, 2012 at 8:00 a.m. (EDT) to discuss the financial results and the Corporation’s operations. Mr. Chadwick Wasilenkoff, President & Chief Executive Officer, Kurt Loewen, Chief Financial Officer, Mr. Alfonso Ciotola, Chief Executive Officer of Landqart and Peter Vinall, President and Chief Executive Officer of Fortress Specialty Cellulose Inc. will host the call.
To participate in the conference call, please dial one of the following numbers:
Dial In Numbers:
403-532-5601 Calgary or International
Toll Free Dial In Number: 1-855-353-9183 from Canada and USA
Participant Pass Code: 15086# Conference Reference Number: 844739#
A replay of the conference call will be available for 7 days. To access the replay, listeners may dial 1-855-201-2300 from Canada or the USA or dial 403-255-0697 from local Calgary or International. The conference reference number is 844739 # and the participant pass code to access the replay is 15086 #.
Source: Fortress Paper Ltd.
Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) (TSX:FTP), announces that its wholly-owned subsidiary, Landqart AG, a leading manufacturer of banknote and security papers, has had a material banknote order reinstated. This order was unexpectedly suspended in the fourth quarter of 2011 which negatively impacted the financial results of Landqart’s operations in the first half of 2012.
Chadwick Wasilenkoff, Chairman, Chief Executive Officer and President of Fortress Paper, commented, “The recommencement of this previously delayed order will provide Landqart with momentum to realize additional orders and maximize operating efficiencies. This important order allows Landqart to better optimize the overall mill and should provide a meaningful contribution to its margins compared to recent quarters.”
VANCOUVER, BRITISH COLUMBIA–(Marketwire – May 31, 2011) -
Fortress Paper Ltd. (TSX:FTP) (“Fortress Paper” or the “Corporation”) announced today that it intends to release its first quarter financial results for the period ended March 31st, 2011 after the close of the market on Tuesday, June 14th, 2011. In connection with the release of its results, Fortress Paper will host a conference call Wednesday, June 15th, 2011 at 9:30 a.m. (PST) to discuss the financial results and the Corporation’s operations. Mr. Chadwick Wasilenkoff, Chief Executive Officer, Alfonso Ciotola, President, Erich Sulser, Chief Operating Officer, Kurt Loewen, Chief Financial Officer and Peter Vinall, President and Chief Executive Officer of Fortress Specialty Cellulose Inc. will host the call.
To participate in the conference call, please dial one of the following numbers:
|Dial In Numbers:||604-681-0262 Vancouver|
|403-532-8075 Calgary or International|
|Toll Free Dial In Number:||1-877-353-9586 from Canada and USA|
|Participant Pass Code:||98030#|
|Conference Reference Number:||545090|
A replay of the conference call will be available for 7 days. To access the replay, listeners may dial 1-877-353-9587 from Canada & the USA or dial 403-699-1055 from local Calgary or International. The conference reference number is 545090 # and the participant pass code to access the replay is 98030 #.
About Fortress Paper Ltd.
Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper‘s security papers include banknote, high security, passport and visa papers and its specialty papers include non-woven wallpaper base products. Fortress Paper‘s pulp business includes NBHK produced at the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Once-moribund industry sprouts new demand and higher share prices.
A the adage goes, the best time to plant a tree is 20 years ago; the second best time is now.
Ideally, investors planted their money into forestry early enough to see their money grow along with the recent surge in commodity and equity prices.
But the second best time to invest money smartly in the sector is now.
Over the past three years, Canadian forestry has suffered through one of the worst periods in its history. And for an industry already facing seasonal decline, there were several possible factors that could have aggravated the problem. Most of them came true.
In late 2006, the U.S. housing bubble popped, sparking what analysts have come to lament as the “lumber depression.”
In 2008, Canada’s forest, paper and packaging sector was the global industry’s worst performer, with the biggest companies accounting for half of the sector’s losses of US$8-billion. That year, Canada was the only country in the world to post a negative return on employed capital.
For companies focusing on building products, 2009 was no better. Severely curtailed demand drove about one-third of building material suppliers out of business, estimates Paul Quinn, a RBC Capital Markets analyst.
The supply chain is empty.
Extremely low inventory levels, when combined with even the modest uptick in demand in recent months, have sent market prices through the roof and the equities of Canadian forestry companies skyward.
The swift and stunning turnaround is evident in the share-price gains of industry leaders over the past year: Canfor Corp. and West Fraser Timber Co.’s have more than doubled to about $10 and $40, respectively. Shares of Fortress Paper Ltd. are up almost 400% to about $22. Now at about the $70-mark, Domtar Corp.’s shares have risen more than 650%. And Canfor Pulp Income Fund is trading at about $15, more than 11 times higher than in May 2009.
With much uncertainty in demand and prices, the challenge for investors is predicting which forestry stocks are poised to be cut down, having risen too far, too fast, and which still have room to grow.
The answer probably depends on investing style. Put money into lumber for long-term gains, says Daryl Swetlishoff, an analyst at Raymond James. For momentum traders looking to capitalize on inflated prices, pulp and paper are probably the best bet.
The fortunes of a Canadian lumber outfit are, of course, intimately tied to the fluctuations of the U.S. housing market. And in 2009, housing starts in the United States totalled 553,000, down almost 75% from the 2005 peak.
“In housing materials, it was really a depression,” Mr. Quinn says. Companies closed sawmills and curtailed production.
This year, a marginal increase in housing starts has combined with emerging demand in China to put some upward pressure on lumber prices.
But depleted inventories have been the true driving force, Mr. Swetlishoff says. “It’s more of a supply-side event.”
According to price tracker Random Lengths, the composite price for western spruce/pine/fir stands at about US$320 per thousand board feet, up more than 50% since the end of 2009.
“The big question in the building material space is: Are today’s high prices sustainable? And have the stocks gotten ahead of themselves?” Mr. Swetlishoff says.
With much variation in recommendations, most analysts monitoring lumber stocks have “hold” or “sector perform” recommendations on large solid-wood companies.
However, Mr. Swetlishoff says he believes those equities are currently trading at mid-cycle valuations and still have room to run. He has “outperform” recommendations on Canfor, West Fraser and International Forest Products Ltd.
“Our take is that if you’re looking at these stocks, it’s not for a six-month trade, because we see an emerging cycle in lumber products.”
Those less optimistic about the sector believe prices are due to fall and compress valuations.
“To the extent that forest-product stocks need ongoing lumber-price gains to outperform, we are doubtful that the recent spurt of share-price strength will persist,” said a report by Montreal-based think-tank BCA Research Inc.
The lack of consensus reflects a great deal uncertainty around market forces. The timing of the U.S. housing recovery is far from a sure bet, with some predicting a surge of shadow inventory from foreclosures and a double dip in prices.
But the price of lumber may be somewhat insulated from demand fluctuations by other supply constraints, including the destruction wrought by the mountain pine beetle, Mr. Swetlishoff argues.
“Until flying over the B.C. central interior and seeing nothing but red (dead) trees for hours, it is difficult to grasp the scale of the disaster that is the … beetle,” Mr. Swetlishoff said in a note.
Also, the reduction in capacity over the past three years is not immediately reversible, even though demand has picked up. And a strong loonie offsets some of the incentive to crank up production, despite the allure of high prices.
“While restarting mills is relatively easy, a strong Canadian dollar would prolong the lean supply backdrop. The latter raises the break-even cost of restarting Canadian mills and/or adding capacity, given that lumber is priced in U.S. dollars,” the BCA report said.
In fact, Mr. Swetlishoff goes so far as to apply the theory of peak oil to timber, predicting that a number of demand and supply factors will combine to produce a lumber “super cycle.”
That will lead to “sustained elevated pricing associated with structural supply deficits,” he wrote. On that front, he recommends International Forest as a small-cap pick, as well as West Fraser and Canfor.
While the peak lumber theory applies to the long term, Mr. Swetlishoff also predicts that the seasonal industry decline expected in the second half of 2010 will not push prices below break-even levels, and thus will not strip his stock picks as recommendations for deep-value investments.
Without the reliance on U.S. housing, pulp and paper companies were better able to weather the recession, but are still enjoying a recent run in prices due to supply constraints.
After a number of pulp mills closed last year, the earthquake in Chile wiped out about 7% to 8% of global capacity. Pulp is expected to hit US$1,000 per tonne soon, an increase of almost 60% since last May.
In that sector, Domtar has consistently beat earnings expectations, attacked its debt levels and recently announced the reinstatement of its dividend.
And even with big gains already realized, Domtar’s equity is considerably undervalued, Mr. Quinn says.
“Domtar’s our favourite story,” he says. “We love it.”
His share-price target is $100, well above Domtar’s current price of about $70.
“It’s balance sheet is underleveraged, it’s going to generate some significant free cash, almost $10 a share in our estimate in 2010,” Mr. Quinn says.
As a unique pulp and paper investment opportunity, Mr. Swetlishoff has a strong “buy” recommendation on Fortress Paper.
The B.C.-based producer of security and specialty papers recently acquired a hardwood pulp mill and converted it to a facility producing dissolving pulp, which is used in the production of rayon, a substitute for cotton with a large market.
“That is one I do not have to stress my model at all, and I get a lot of upside,” he said. “A lot of the other stocks I cover, I run pretty hard.”
In the wood-panel market, Norbord Inc. continues to garner “buy” recommendations on the strength of an extraordinary price environment for oriented strand board, whose price has soared to the highest levels in five years.
“At this price, they’re making lots of money,” Mr. Quinn says.
By: Tim Shufelt, Financial Post
Source: National Post
VANCOUVER, British Columbia, May 11 2010 – Fortress Paper Ltd. (“Fortress Paper” or the “Company”) (TSX:FTP) reported adjusted net income of $3.0 million for the first quarter of 2010 on sales of $50.3 million or adjusted earnings per share of $0.30. In the first quarter of 2009 the Company reported adjusted net income of $2.5 million on sales of $46.6 million or adjusted earnings per share of $0.25. For the fourth quarter of 2009 the Company reported adjusted net income of $4.8 million on sales of $51.0 million or adjusted earnings per share of $0.47.
Analysis of Specific Items Affecting Comparability of Net Income
|(thousands of dollars, except per share figures, unaudited)||Q1 2010||Q4 2009||Q1 2009|
|Net income as reported||179||3,720||3,584|
|Foreign exchange loss (gain)||2,380||1,073||(1,055)|
|Deferred expenses written off||476||-||-|
|Adjusted net income||3,035||4,793||2,529|
|Net income per share (EPS), as reported||0.02||0.35||0.35|
|Impact of above item per share||0.28||0.12||(0.10)|
|Adjusted net income per share||0.30||0.47||0.25|
EBITDA was $5.8 million or 11.5% of sales for the three months ended March 31, 2010. For the three months ended March 31, 2009 EBITDA was $5.0 million or 10.8% of sales. EBITDA was $7.9 million or 15.4% of sales for the three months ended December 31, 2009.
In the first quarter of 2010 the Dresden mill continued to experience strong sales and earnings throughout the quarter. The Landqart mill results reflected the product mix during the quarter. The banknote paper machine remains full and the conversion of paper machine one from a specialty paper machine to a banknote paper machine is on track. The increase in EBITDA relative to the prior year comparative period was partially due to the global financial and economic crisis which impacted sales early in 2009.
EBITDA is defined as net income before interest, income taxes, depreciation, amortization, non-operating income and expenses and stock based compensation which the Company considers to be a key performance indicator. EBITDA is not a generally accepted earnings measure and should not be considered as an alternative to earnings or cash flows as determined in accordance with Canadian generally accepted accounting principles. As there is no standardized method of calculating EBITDA, the Company’s use for the term may not be comparable with similarly titled measures used by other companies.
Chadwick Wasilenkoff, chief executive officer of Fortress Paper, states: “This is an exciting time for the Company. The recently announced acquisition of the Thurso mill will diversify our specialty product mix and we believe will provide a significant financial contribution to Fortress’s growth aspirations. We plan to ramp up operations at the Thurso mill while we immediately begin the conversion into a dissolving pulp operation. The Dresden mill continues to perform extremely well, while the Landqart mill is experiencing results which are reflective of the current product mix of banknotes which offer lower margins.”
Selected Financial Information
The selected financial information presented herein is qualified in its entirety by, and should be read in conjunction with, our audited consolidated financial statements as at and for the year ended December 31, 2009 and the related notes thereon and our Management’s Discussion and Analysis filed on SEDAR.
Three Months Ended March 31, 2010
Selected Financial Information and Statistics
|(thousands of dollars, except per unit amounts and shipments, unaudited)||Q1 2010||Q4 2009||Q1 2009|
|Weighted average shares outstanding basic (thousands)||10,234||10,234||10,234|
|Weighted average shares outstanding diluted (thousands)||10,713||10,487||10,234|
Landqart produces various security and specialty papers. Security paper production includes banknote paper which results in varying degrees of EBITDA margin depending on the complexity of the features included. During 2008 Landqart also started producing non-woven wallpaper base. Included in Landqart’s sales number for the quarter ended March 31, 2010 is approximately 1,581 tonnes of non-woven wallpaper base. At the Landqart mill the order log for security papers remains stable.
At the Dresden mill, the wallpaper base market experienced continued strength throughout the quarter. Sales tonnage has increased relative to the prior year comparative periods and profitability remains solid.
On April 30, 2010 the Company completed the purchase of a northern bleached hardwood kraft pulp mill located in Thurso, Quebec from Fraser Papers Inc. through a wholly-owned subsidiary, Fortress Specialty Cellulose Inc. (“Fortress Specialty Cellulose”), for the net proceeds of approximately $1.2 million. The Company has announced the intention of converting this mill into a specialty cellulose (dissolving pulp) operation and to build a biomass-based cogeneration plant. The valuation of this acquisition for accounting purposes and the effect on the financial statements of the Company are still being determined.
Concurrent with this acquisition the Company finalized $102.4 million in project financing with a term of 10 years secured by the assets of Fortress Specialty Cellulose. Interest will be calculated at a fixed rate of 5.0% per annum for the first five years, followed by a rate of up to 5.5% for the remaining 5 years.
Also concurrent with this acquisition Fortress Paper issued a $15 million convertible debenture to a financial institution. The convertible debt matures in five years with an interest rate of 7% per annum. The debenture is convertible, in whole or in part, at the option of the holder into common shares of Fortress Paper at any time at a conversion price equal to $20.00 per share. Fortress Paper can redeem the debenture, in whole or in part, at any point after two years at a conversion price of not less than $25.00 per share.
Fortress Paper is a leading international producer of security and other specialty papers. The Company operates two paper mills, the Landqart mill located in Switzerland and the Dresden mill located in Germany. The Company’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. As an extension of its security papers business, the Landqart mill has been actively developing and marketing innovative paper-based security products.
A conference call to discuss the financial results for the first quarter 2010 will be held on May 12, 2010 at 8:00 a.m. (PST). To attend the conference call, please dial one of the following numbers:
North America: 1-877-353-9586
Participant pass code: 90198#
A replay of the conference call will be available for 7 days. To access the replay, listeners may dial 1-877-245-4531 from North America or 403-205-4531 International. The pass code to access the replay is 347381#.
For more information, please contact
Fortress Paper Ltd.
Mr. Chadwick Wasilenkoff
Chief Executive Officer
VANCOUVER, British Columbia, May 10 2010 – Fortress Paper Ltd. www.fortresspaper.com (“Fortress Paper” or the “Corporation”) (TSX:FTP) announces that its wholly-owned subsidiary, Fortress Specialty Cellulose Inc. (“Fortress Specialty”) has entered into a pulp purchase and sale agreement (the “Agreement”) with International Forest Products Corp. (“IFP”) of Foxboro, Massachusetts.
Pursuant to the terms of the Agreement, IFP will be the exclusive distributor for the sale of northern bleached hardwood kraft (“NBHK”) pulp produced at the Thurso Mill for the duration of such production.
The Thurso Mill is expected to commence commercial production in June of this year and is anticipated to produce approximately 250,000 air dry metric tonnes of high quality NBHK pulp per year. The re-start plans are on track and the mill expects to promptly deliver the high quality that it was well known for in the market place.
“Everyone at International Forest Products Corporation (IFP) is extremely pleased to be working with Fortress Paper on this exciting venture,” said Daniel Kraft, President and CEO of IFP. “This relationship will align IFP with one of the world’s premier specialty paper producers.”