VANCOUVER (CP) - Catalyst Paper Corp. (TSX:CTL) plans to cut its newsprint production by more than 10 per cent in 2007, CEO Russell Horner said Friday.
"While I believe newsprint will always form part of our portfolio, we have been on a constant program of reducing our exposure to newsprint," Horner told a conference call with analysts.
"In 2007, we will only have one paper machine in the company fully dedicated to newsprint."
For the nine months ended Sept. 30, Catalyst produced 533,500 tonnes of newsprint at an average cash cost of $651 per tonne. Average sales revenue was $759 per tonne.
The Vancouver pulp and paper company said Thursday it earned a profit of $2.5 million or a penny per share for the three months ended Sept. 30. That compared with a profit of $32.4 million or 16 cents a share a year ago when the company recorded a $38.4-million gain on foreign-exchange.
Sales in the third quarter rose to $486 million from $450.3 million.
In breaking down operations, Catalyst said demand for the company's pulp products was strong in the third quarter, with European benchmark pulp prices reaching a six-year high.
"We expect the pulp market to remain strong for the balance of the year and probably into next year, but that's about as far ahead as anyone can predict pulp.
However, while newsprint prices rose slightly in the quarter, consumption and demand in the key United States market continued to fall, the company said.
Catalyst has an annual production capacity of 701,000 tonnes and produces newsprint on five of its 11 paper machines.
Newsprint sales accounted for about 27 per cent of its consolidated sales revenue for the first nine months of 2006 with 85 per cent of its sales volumes to customers in North America and Asia.
During the quarter, the company said it spent $2.2 million dealing with an offer by New York investment firm Third Avenue Management LLC to increase its stake in the company.
Catalyst's board recommended against the tender offer but cancelled a shareholder rights plan that would have blocked Third Avenue, allowing shareholders to decide for themselves.
Third Avenue said earlier this week it succeeded in its bid for 39 million shares, or 18.2 per cent of Catalyst. The purchase increases its stake in the company to 37.97 per cent.
Catalyst is a leading producer of mechanical printing papers in North America, as well as market kraft pulp. The company operates five mills and employs about 3,800 people on the south coast of British Columbia.
Catalyst shares were down a penny at $3.29 in midday trading on the Toronto Stock Exchange.
