UPDATE 1-Resolute Forest Products' loss mounts as harsh winter bites

Thu May 1, 2014 9:16am EDT
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May 1 (Reuters) - Resolute Forest Products Inc posted a bigger first-quarter loss after an abnormally cold winter made power more expensive and disrupted shipments of specialty paper and pulp.

The Montreal-based company, one of the largest producers of newsprint in North America, also said lower average prices for its newsprint, specialty papers and wood products eclipsed an increase in pulp prices.

"The abnormally cold winter caused a material increase in energy costs, production disruptions, equipment failures and distribution constraints," said Richard Garneau, the company's president and chief executive.

Distribution constraints were likely to continue through the second quarter, he said.

Resolute Forest Products said its net loss widened to $50 million, or 53 cents per share, in the quarter ended March 31, from $5 million, or 5 cents per share, a year earlier.

Revenue fell 5.4 percent to $1.02 billion.

The company, formerly known as AbitibiBowater Inc, said it lost about 30,000 metric tons of production in the first quarter due to natural gas curtailments, higher electricity costs and reduced availability of transport.

It said the seasonal effect of winter, more severe than usual, cost the company $55 million in operating income.

Specialty papers generated an operating loss of $24 million and newsprint recorded a $15 million operating loss in the first quarter.

Resolute Forest Products' shares closed at $17.84 on the New York Stock exchange on Wednesday. (Reporting By Shubhankar Chakravorty in Bangalore; Editing by Don Sebastian and Robin Paxton)