(Recasts with mill announcement)
VANCOUVER, British Columbia, Feb 13 (Reuters) - Catalyst Paper Corp CTL.TO will restart a paper machine at its Port Alberni, British Columbia, mill that it had idled indefinitely last year, the company said on Wednesday.
The announcement came as Catalyst posted a fourth-quarter profit of C$12.4 million ($12.4 million), on an adjustment of its taxes, but said tough market conditions resulted in a C$32 million net loss and C$150 million operating loss for all of 2007.
Catalyst said it agreed to restart the No. 4 paper machine and invest C$12 million to upgrade the plant’s pulping facility after striking deals with the plant’s workers and Port Alberni city tax officials to reduce costs.
The machine was idled in September because it was too costly to operate, but will be back in operation by mid-2008. The mill’s other paper machine had remained in operation.
The machine’s idling was part of a series of cutbacks the pulp and paper maker announced last year, but the company said on Wednesday it was beginning to see the benefit of the reduced costs.
Catalyst said it was looking toward improved market conditions for paper sales in 2008, but it was concerned about a U.S. economic downturn. The weak housing market in the United States also made it difficult to get woodchips for pulping as more sawmills are idled.
Catalyst said it had a net profit of C$12.4 million, or 6 Canadian cents a share in the fourth quarter of 2007. That compared with a loss of C$37.2 million, or 17 Canadian cents a share, in the same quarter a year earlier.
This year’s results included a C$35 million release of future income taxes.
Catalyst’s operations are now based in Western Canada, but it said on on Monday it would buy a recycled newsprint mill in Arizona from AbitibiBowater ABH.TO ABH.N for US$161 million. (Reporting Allan Dowd, Editing by Rob Wilson)