July 29, 2008 / 4:02 PM / 9 years ago

UPDATE 1-Catalyst Paper reports Q2 loss on C$101-mln charge

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TORONTO, July 29 (Reuters) - Catalyst Paper Corp CTL.TO reported a second-quarter loss on Tuesday, hurt by an impairment charge related to the impending closure of its Elk Falls pulp and white top linerboard operation.

The pulp and paper maker said it lost C$124.3 million, or 34 Canadian cents a share. That follows a profit of C$200,000 in the second quarter of 2007.

Catalyst took a net impairment charge of C$101 million related to terminating operations at its Elk Falls mill in November, following the loss of a source of sawdust supply when a neighboring sawmill shut down.

Catalyst reported an operating loss of C$153.3 million, compared with a loss of C$46.7 million a year earlier. Sales were C$452.9 million, up slightly from C$441.8 million.

The Richmond, British Columbia-based company said that a sawdust-fiber shortage, which has been in effect since late 2007, intensified in the second quarter of 2008, as the U.S. housing slump caused sawmills supplying Catalyst with sawdust to close, reduce or divert production.

The company said lumber markets would remain weak through the rest of the year and continue to put a strain on the availability of fiber. ($1=$1.103 Canadian) (Reporting by Jennifer Kwan and Leah Schnurr; Editing by Bernadette Baum)

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