MIAMISBURG – The parent company of a local paper mill recorded another quarter loss.
Last Wednesday, NewPage Corporation announced its results of operations for the second quarter of 2009.
A release issued from the company states net sales were $736 million in the second quarter of 2009, compared to $1,063 million during the same time period last year, which equates to a drop of 31 per cent.
The company stated the decrease resulted from lower sales volumes and lower average coated paper prices caused by a significant decline in advertising spending and reductions in customer inventory levels. The net loss attributable to NewPage was $6 million in the second quarter of 2009 compared to a net loss attributable to NewPage of $21 million during the same time period last year.
The company stated the difference is due to the benefit of alternative fuel mixture tax credits and reduction in raw material costs, partially offset by the lower sales volumes and lower average sales prices.
“The significant decline in demand for coated paper during the second quarter of 2009, in comparison to the second quarter of 2008, was primarily the result of decreased advertising spending and magazine and catalogue circulation, and was largely a continuation of the same macroeconomic forces we saw in the first quarter,” stated Richard D. Willett, Jr., NewPage president and CEO. “In addition, we believe that the decline in pricing was accelerated by producers passing on the benefits of the alternative fuel mixture credit to customers and we anticipate continued pressure on paper prices for the near term. “In an effort to balance supply with demand, we took 161,000 tons of market-related downtime during the second quarter of 2009. This is in addition to the 149,000 tons of market-related downtime we took during the first quarter of this year and the 1.1 million tons of capacity we shut down last year.”
Willet stated the company, during the second quarter, reduced discretionary spending to sustain business and pointed to the “market related downtime.”
“Despite the difficult economic and business conditions, we see potential improvement in the second half of 2009,” he stated in the release. “We remain focused on operating the business and providing our customers with the best products and services in the industry. Our employees are helping us manage through the weak market and support a number of cost productivity programs across the business.”