Domtar Corporation (UFS) has reported 17.54 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $47 million, or $0.75 a share in the quarter, compared with $57 million, or $0.91 a share for the same period last year.
Revenue during the quarter dropped 3.04 percent to $1,274 million from $1,314 million in the previous year period. Gross margin for the quarter contracted 209 basis points over the previous year period to 21.27 percent. Total expenses were 94.19 percent of quarterly revenues, up from 92.85 percent for the same period last year. That has resulted in a contraction of 135 basis points in operating margin to 5.81 percent.
Operating income for the quarter was $74 million, compared with $94 million in the previous year period.
"Our pulp business shipped record volumes of softwood in the fourth quarter. Nevertheless, the segment was impacted by lower prices and higher costs," said John D. Williams, president and chief executive officer. "Personal Care began manufacturing baby diapers using Ashdown fluff pulp with initial trials providing good results. This production is the first step towards qualifying Ashdown fluff pulp for the hygiene market."
Operating cash flow improves marginally
Domtar Corporation has generated cash of $465 million from operating activities during the year, up 2.65 percent or $12 million, when compared with the last year.
The company has spent $391 million cash to meet investing activities during the year as against cash outgo of $244 million in the last year. It has incurred net capital expenditure of $346 million on net basis during the year, up 36.76 percent or $93 million from year ago.
The company has spent $73 million cash to carry out financing activities during the year as against cash outgo of $249 million in the last year period.
Cash and cash equivalents stood at $125 million as on Dec. 31, 2016, down 0.79 percent or $1 million from $126 million on Dec. 31, 2015.
Working capital increases
Domtar Corporation has recorded an increase in the working capital over the last year. It stood at $815 million as at Dec. 31, 2016, up 6.40 percent or $49 million from $766 million on Dec. 31, 2015. Current ratio was at 2.08 as on Dec. 31, 2016, up from 1.97 on Dec. 31, 2015.
Debt moves up marginally
Domtar Corporation has witnessed an increase in total debt over the last one year. It stood at $1,293 million as on Dec. 31, 2016, up 3.36 percent or $42 million from $1,251 million on Dec. 31, 2015. Total debt was 22.76 percent of total assets as on Dec. 31, 2016, compared with 22.09 percent on Dec. 31, 2015. Debt to equity ratio was at 0.48 as on Dec. 31, 2016, up from 0.47 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 4.35 for the quarter from 5.53 for the same period last year.
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