Our preliminary Domtar quarterly financial report for Q2 2018 is in. Highlights from this Domtar second-quarter financial report include:
- Second-quarter 2018 net earnings of $0.68 per share
- Pulp and paper price improvement continues
- $177 million of cash flow from operating activities
Domtar Quarterly Review
Domtar reported net earnings of $43 million ($0.68 per share) for the second quarter of 2018 compared to net earnings of $54 million ($0.86 per share) for the first quarter of 2018 and net earnings of $38 million ($0.61 per share) for the second quarter of 2017. Sales for the second quarter of 2018 were $1.4 billion.
“We had a solid performance in Pulp and Paper given the extensive scheduled maintenance outages at several facilities. Both businesses are providing us with good sales and cash flow, and we are building on several important initiatives,” said John D. Williams, president and chief executive officer. “We continued to implement our announced price increases throughout the quarter with higher price realizations in both pulp and paper, which helped offset higher maintenance and inflation on some raw material and freight costs.”
Commenting on Personal Care, Mr. Williams added, “As expected, Personal Care results were impacted by anticipated volume reduction and continued commodity inflation. This was partially offset by strong cost savings and reduced overhead spending. We expect to improve margins toward the end of the year as the benefits of the new customer wins flow through.”
Operating income was $62 million in the second quarter of 2018 compared to operating income of $77 million in the first quarter of 2018. Depreciation and amortization totaled $79 million in the second quarter of 2018.
For the remainder of the year, we expect our paper shipments to trend better than market given the announced industry capacity closures. The announced price increases in paper are expected to continue to positively impact results in the second half of 2018. Pulp will benefit from lower planned maintenance costs, and we expect prices will continue to trend positively. Personal Care results should improve toward the end of the year as the benefits of the new customer wins flow through. We expect moderate inflation in our costs for the second half of the year.