July 30, 2010 / 10:25 AM / in 7 years

Catalyst Paper posts Q2 loss on asset writedown

* Expects pulp prices to soften in Q3

* Sees modest improvements in paper markets in H2

July 30 (Reuters) - Canadian paper maker Catalyst Paper CTL.TO posted a wider second-quarter net loss, hurt by impairment and closure costs, and said it expects pulp prices to soften in the third quarter.

Modest improvements in paper markets are expected to continue through the second half of the year with a seasonally strong third quarter.

For the second quarter, the company posted a net loss of C$368.4 million, or 96 Canadian cents per share. That compares with a net loss of C$1.9 million, or 1 Canadian cent a share, a year earlier.

Results for the latest quarter were hurt by impairment and costs of C$302 million on the closure of the Elk Falls and Paper Recycling divisions, the company said.

In July, the company said it would permanently close the 58-year-old Elk Falls paper mill in September and immediately close paper recycling operations in Coquitlam. [ID:nSGE6650J9]

Excluding items, Catalyst posted a loss of 11 Canadian cents a share.

Analysts polled by Thomson Reuters I/B/E/S had on average forecast a loss of 7 Canadian cents a share.

Sales fell to C$299.4 million from C$300.7 million last year.

Shares of the company closed at 16 Canadian cents Thursday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Vinu Pilakkott)

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