Lower profits for Domtar

Domtar announced its financial results for the second quarter of 2010. It reflects a net profit of $ 31 million compared to $ 58 million for the first quarter.

This decline in earnings for Domtar is primarily attributed to a loss on the sale of its timber worth $ 50 million . It also includes costs for the acquisition of part of the company’s long- term debt and a charge of $14 million related to the loss and write down of fixed assets and closure costs and reorganization of $5 million .

“We continue to effectively carry out our task to produce solid financial results , “said President and CEO at Domtar, John D. Williams in a release . I am pleased that these efforts, combined with our successful bid to repurchase a portion of the long-term debt have been recognized by rating agencies.”

Indeed, with the exception of items listed above , the company recorded earnings of $ 116 million . The action is therefore amounted to $ 2.67 versus $ 1.59 for the first quarter of 2010 . The rating agencies have therefore recognized the efforts of Domtar to improve their situation.

According to the company’s forecasts , shipments of paper should remain stable during the third quarter. They are expected to decline late in the quarter because of seasonal factors.

United Malt Makes Pretty Profit for Castle Harlan

Castle Harlan Logo
Castle Harlan Logo

With their sale of United Malt Holdings for $655 million, Castle Harlan was able to realize a respectable profit, approximately 4 and a half times the money invested.

Castle Harlan and Champ Private Equity, an Australian affiliate company with Castle Harlan, sold the portfolio company, the world’s fourth largest producer of malt, to GrainCorp of Australia.

In 2006 the partners invested in total $90.54 million in equity in United Malt, which was purchased at the time from Conagra Foods and Tiger Brands. Castle Harlan supplied 55 percent of the investment, while Champ supplied the remaining percentage.

The internal rate of return was about 80 percent, but it would be incorrect to believe that the deal was risk free. Earlier tries to see United Malt ended unsuccessfully, according to BusinessWeek.