Domtar Corporation Reports Increased Sales but Significant Operating Loss in Q2 2025

Domtar Corporation reported its financial results for the second quarter and first half of 2025, revealing a slight increase in sales but a significant operating loss. For the three months ended June 30, 2025, the company generated sales of $1,763 million, a 1% increase from $1,750 million in the same period of 2024. However, the operating loss widened to $70 million compared to a loss of $58 million in the prior year. The net loss for the quarter was $76 million, a substantial increase from the $8 million loss reported in the second quarter of 2024.

In the first half of 2025, Domtar's sales rose to $3,623 million, up from $3,536 million in the first half of 2024. Despite this growth in revenue, the company recorded an operating loss of $4 million, a decline from the $1 million operating income in the first half of 2024. The net loss for the first six months of 2025 was $70 million, compared to an $8 million loss in the same period last year. The increase in losses was attributed to higher input and maintenance costs, lower production volumes, and the impact of the indefinite curtailment of operations at the Ashdown facility.

Strategically, Domtar has been active in acquisitions and divestitures. The company completed the acquisition of Iconex Paper in November 2024 for $208 million, which is expected to contribute approximately $300 million in annual sales. Additionally, Domtar signed agreements to sell its Espanola, Ontario mill and the Forest Products Mauricie sawmill, with the latter sale completed for $16 million in July 2025. These moves are part of Domtar's strategy to streamline operations and focus on more profitable segments.

Operationally, the company reported mixed performance across its segments. The Paper and Packaging segment saw sales increase by 3% in the second quarter, driven by higher selling prices, while the Pulp and Tissue segment experienced an 11% decline in sales due to lower volumes and prices. The Wood Products segment reported a 9% increase in sales, benefiting from higher average selling prices. Domtar's total assets increased to $7,444 million as of June 30, 2025, compared to $7,316 million at the end of 2024, reflecting ongoing investments and operational adjustments.

Looking ahead, Domtar anticipates stable demand and pricing for paper products, with modest improvements expected in pulp demand. However, the company remains cautious about potential downward pressure on pulp prices and the impact of ongoing tariffs on its operations. Domtar's focus will continue to be on managing costs and optimizing cash flow while navigating the challenges posed by market conditions and competitive pressures.