* Net profit C$0.06/shr vs year-earlier loss C$0.13
* To extend production curtailments
* Shares rise 3 Canadian cents to 19-1/2 Canadian cents
VANCOUVER, British Columbia, April 29 (Reuters) - Canadian papermaker Catalyst Paper CTL.TO reported a quarterly profit on Wednesday and credited cost-cutting and a gain from a debt buyback.
But Catalyst said the weak economy is expected “to reduce the company’s ability to sustain recent operating earnings,” and it said it will extend production curtailments it announced earlier this year.
Catalyst had a net profit in the first quarter of C$21 million ($17.5 million), or 6 Canadian cents a share, on sales of C$352.5 million. The net profit figure includes a C$30.7 million gain on a debt buyback.
In the year-before quarter, the company reported a loss of C$48.5 million, or 13 Canadian cents a share, on sales of C$492.2 million.
Its operating profit was C$24.2 million, compared with C$11.5 million in the year-before quarter.
Catalyst has been working with its unions to reduce production costs, and now has agreements in place at its Port Alberni mill in Canada and Snowflake in the United States. It is talking with unions at other mills.
The company said it cut production by 180,300 tonnes during the first three months of the year, and that was expected to increase to at least 269,700 tonnes in the second quarter.
Catalyst shares were up 3 Canadian cents at 19-1/2 Canadian cents on the Toronto Stock Exchange on Wednesday afternoon.
$1=$1.20 Canadian Reporting Allan Dowd, editing by Peter Galloway