MONTREAL - Forest products firm Tembec says earnings could reach $34 million this quarter, up from $2 million last quarter when some of its operations closed for maintenance. The decrease in the relative value of the Canadian dollar, which averaged US $0.77 in the months of July and August compared to US $0.813 in the June 2015 quarter, is also contributing to the more favourable operating results, says Tembec.
Tembec said released its forecast early as it negotiates for additional investment.
Tembec says it expects that adjusted EBITDA for the September 2015 quarter will be in the range of $31 million to $34 million. This compares with adjusted EBITDA of $2 million in the previous quarter. The June 2015 quarterly results had been negatively impacted by significant planned major maintenance activities at the Temiscaming, Quebec and Tartas, France complexes.
In May, Tembec suspended operations and layed off 360 at its three sawmills in Quebec due to the high cost of wood supply in the Abitibi-Témiscamingue region, which makes its sawmills uncompetitive given what it called "persistent weak market prices for lumber in North America."
Tembec has 3,400 employees and annual sales of $1.6 billion.
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