Outlook cheery in Celgar financial report

CEO pleased with stats and trends

Mercer International has released its latest financial report for the Zellstoff Celgar Mill in Castlegar and the news is good.

“I think the second quarter was reasonably positive,” said Mercer chairman and CEO Jimmy Lee. “We had an EBITDA (earnings before interest, taxes, depreciation, and ammortization) basis for the second quarter of slightly over $50 million euros.

”The Celgar Mill marked its 50th anniversary of operations this summer with tours of the facility and speeches from company, city and union representatives including Lee. The mill was purchased in 2005 by Mercer International and renamed Zellstoff Celgar in keeping with the naming of it’s other two mills, which are in Germany.

 

 

“The Celgar Mill ran well in the second quarter, albeit we had about 11 days of maintenance shutdown and significant refurbishment of the turbine which was earlier then we originally expected,” said Lee.

“When we opened it up it looked like we needed to do it. I think it could’ve created significant issues if we didn’t do that.Which of course meant that we weren’t generating the level of power that we would’ve expected because I think the turbine was down for about three weeks or so… far in excess of the shutdown for the mill,” said Lee.

“Power income was lower than what we would’ve expected but that was due to maintenance.”The Celgar Mill was scheduled for turbine maintenance in 2012, but when opened up it was decided to proceed with maintenance plans a year ahead of time.“

“The opening up of the turbine clearly showed we needed to do some maintenance work on it. That needed to be addressed so we accelerated that particular program. If we didn’t open up the turbine we probably would have had problems.

So that was very timely,” said Lee. “Other then that the mill ran reasonably well. Production volumes other than the maintenance was above prior quarters. Certainly the mill is running better.”

 

 

Lee expects that the mill, which employs around 500 people, will run even better in the future and continue to benefit the region.“Indications are that mill reliability will continue to improve,” stated the CEO.

“Moving forward I think everyone is focussed. Of course, in the summer months we typically have a seasonal weakness primarily coming in China.”China is the major market for the Celgar Mill. Although China prices have dropped a little, expectations are that things will improve after the summer months, said Lee.

“Celgar continues to perform well. The wood situation in Celgar is much better in terms of wood pricing. “Therefore, the margins are attractive. Overall, Celgar is generating pretty decent cash and continued investments,” said Lee.