Resolute’s Garneau Sees Slower Decline in Demand for Newsprint
Resolute Forest Products Inc. (RFP), the world’s largest maker of newsprint, said it expects the rate of decline in North America’s appetite for the commodity to slow, spurred by demand for advertising inserts.
Demand for newsprint in North America fell 9.5 percent in the first half of this year, more than the 7 percent maximum drop the company expected, Richard Garneau, the Montreal-based company’s chief executive officer, said today in a telephone interview.
“We do expect a slower decline” in the second half, buoyed by demand from newspapers for paper ahead of the Christmas and back-to-school shopping seasons, he said. “We’re not expecting the same decline in the second half.”
Resolute, formerly known as AbitibiBowater Inc., is one of the paper makers hurt by falling demand for the commodity as newspaper circulation declines and electronic communications become more popular.
The company’s second-quarter loss widened to $43 million, or 45 cents a share, from a year-earlier loss of $17 million, or 17 cents, the company said today in a statement. Profit excluding one-time items such as inventory writedowns from facility closings, was 19 cents a share, more than the 18-cent average of four estimates compiled by Bloomberg.
Resolute fell 5.9 to C$14.77 at 12:31 in Toronto, after earlier dropping as muich as 6.6 percent. The shares have gained 13 percent this year.
Garneau said Resolute is the world’s largest newsprint producer by production capacity.
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