Alternative fuel credit helps International Paper avoid Q3 loss

The firm’s third-quarter profits were up 113% year-on-year to $371m (£224m) compared to the same period last year, buoyed by a $525m pre-tax credit from the US federal government for using alternative fuels.

However, the group’s net sales suffered from falling demand, down 13% to $5.9bn, from $6.8bn in 2008. Sales at International Paper’s consumer packaging division were down marginally, from $2.3bn in Q3 of 2008 to $2.2bn; while consumer packaging was down from $830m to $790m.

The group’s printing papers division saw sales fall dramatically. They fell from $1.8bn in 2008 to 1.5bn this year. The firm’s distribution division’s sales were down from $2bn to $1.7bn; and forest product sales fell from $55m in 2008 to just $5m.

Operating profit was up significantly – it climbed 56% to $940m.

John Faraci, International Paper’s chairman and chief executive, said: “At the end of the third quarter we began to see some modest improvements in demand in some segments of our paper and packaging businesses.

“We expanded margins year-over-year and continued to deliver strong cash flow and pay down debt, and I’m confident we’re in a position to benefit as the economy continues to slowly recover.”

It is the second set of results in which IP has reported it has benefitted from tax credits awarded for using alternative fuel sources.

In the second quarter of the year, the firm received a credit worth $482m that trebled its profits.

Click here for today’s headlines from across the packaging industry

Popular Articles