Domtar ends year strong, returns $543 million to shareholders in 2011

By Lisa Kerner

Charlotte, N.C., Feb. 3 - Domtar Corp. "delivered a strong finish to a great year," president and chief executive officer John D. Williams said during the company's fourth-quarter earnings call on Friday.

Despite a softness in pulp prices during the second half of the year, Domtar maintained its focus on customers, costs and cash and can report "excellent" free cash flow generation and strong returns in its paper business.

As a result, Domtar was able to purse its commitment to returning most of its free cash flow to shareholders.

"In 2011, we returned over $543 million, or $13.50 per share, representing 73% of total free cash flow, through a combination of share buyback and regular dividends," Williams said.

For fiscal 2011, Domtar's cash flow from operations was $883 million and capital expenditures totaled $144 million, resulting in free cash flow of $739 million, said chief financial officer Daniel Buron.

Domtar's debt-to-total capitalization ratio was 12% at Dec. 31, compared with 9% at Dec. 31, 2010.

The Montreal-based paper company reported net earnings of $61 million, or $1.63 per share, for the fourth quarter of 2011, compared with net earnings of $325 million, or $7.59 per share, for the prior-year period.

For fiscal year 2011, net earnings totaled $365 million, or $9.08 per share, compared with net earnings of $605 million, or $14.00 per share, for fiscal year 2010.

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