IR Highlights
Domtar Corporation (NYSE/TSX: UFS) is the largest integrated producer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade pulp. The Company designs, manufactures, markets and distributes a wide range of business, commercial printing, publication as well as technical and specialty papers with recognized brands such as First Choice®, Domtar Microprint®, Windsor Offset®, Cougar® as well as its full line of environmentally and socially responsible papers, Domtar EarthChoice®. Domtar owns and operates Domtar Distribution Group, an extensive network of strategically located paper distribution facilities. Domtar also produces lumber and other specialty and industrial wood products. The Company employs nearly 13,000 people.
CEO Quote
“Our first quarter financial performance was affected by higher-than-expected inflation on raw materials, which was only partially offset by price increases implemented late in the quarter. Nevertheless, we were able to maintain a balance in our paper production system with a shipments-to-production ratio above 100 percent, resulting in a papers inventory reduction,” said Mr. Raymond Royer, President and Chief Executive Officer of Domtar. “Compared to the fourth quarter, we had few incremental savings from synergies but our plans are on track. Our goal is to surpass $200 million of synergies on a run-rate basis before year-end while, in the near term, reaping the benefits from the carry-over of recently implemented price increases in papers and pulp,” added Mr. Royer.
Commenting on capital allocation, Mr. Royer said, “Our business fundamentals are sound and I am pleased with the progress Domtar has made since March 2007 toward paying down debt to improve its investment profile. Nevertheless, the uncertain financial markets remind us of the importance of maintaining access to capital markets. Given the added challenges of a slowing economy and current inflationary pressures, we must further increase our financial strength. Consistent with our targeted leverage ratios, we will continue to apply our excess cash flow to debt reduction to lower our cost of capital with the objective to get as close as possible to investment grade for the benefit of our shareholders.”