Fortress Paper Announces Third Quarter 2016 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 14, 2016) - Fortress Paper Ltd. (TSX:FTP) ("Fortress Paper" or the "Company") reported 2016 third quarter operating EBITDA of $7.6 million, an increase of $1.3 million and $2.1 million over the previous quarter and prior year comparative period, respectively. The Dissolving Pulp Segment generated operating EBITDA of $11.9 million and the Security Paper Products Segment incurred EBITDA loss of $1.8 million. Corporate costs included in operating EBITDA were $2.5 million.

"Management is pleased to report an improved quarter of operating EBITDA compared to the prior quarter and our best consolidated operating EBITDA result since the restart of the FSC mill after its conversion to a dissolving pulp mill," stated CEO Yvon Pelletier. "The Company's fourth quarter results, as is typical, will be impacted by the annual scheduled maintenance shutdown and subsequent ramp up. Incorporating the impact of the planned shutdown, management expects fourth quarter results at the FSC mill to be lower relative to the prior quarter. Management believes the third quarter results at the Landqart mill are not representative of the future profitability of the order book. The Landqart mill incurred certain unanticipated expenses in the third quarter, as well as expenditures for investment in future sales growth that are not expected to reoccur. The Landqart mill is expected to contribute positively in the fourth quarter."

Third Quarter 2016 Segment Results

Dissolving Pulp Segment generated operating EBITDA of $11.9 million for the quarter ended September 30, 2016 representing an increase of $8.7 million compared to the second quarter of 2016. The third quarter of 2016 was favourably impacted by an improved cost structure, improved pricing and an increase in cogeneration revenues. Operating EBITDA results for the third quarter of 2016 increased by $6.5 million compared to the third quarter of 2015. This improvement was a result of higher dissolving pulp prices and an improved cost structure. During the quarter ended September 30, 2016, the Fortress Specialty Cellulose ("FSC") mill sold 40,992 ADMT of dissolving pulp compared to 39,931 ADMT and 45,377 ADMT in the previous quarter and prior year comparative period, respectively.