Domtar Corporation Reports 4% Revenue Increase to $1.86 Billion in Q1 2025

Domtar Corporation reported its financial results for the first quarter of 2025, revealing a revenue of $1.86 billion, a 4% increase from $1.79 billion in the same period last year. The company achieved a net income of $6 million, compared to a net loss in the first quarter of 2024. Operating income rose to $66 million, up from $59 million in the prior year, driven by higher average selling prices across most product lines and a favorable exchange rate, despite facing increased input and maintenance costs.

The company noted significant operational changes, including the sale of its Espanola, Ontario mill, which was idled in September 2023 due to ongoing losses. The sale agreement was signed on April 9, 2025, and is pending regulatory approval. Additionally, Domtar completed the acquisition of Iconex Paper in November 2024 for $208 million, which is expected to contribute approximately $300 million in annual sales. The first quarter results included contributions from Iconex, which helped offset declines in paper product volumes due to machine closures.

Domtar's operational metrics showed mixed results. The Paper and Packaging segment reported sales of $1.28 billion, up from $1.20 billion, with operating income increasing to $96 million from $79 million. However, the Pulp and Tissue segment saw a slight decline in sales to $366 million, with operating income dropping to $1 million from $18 million. The Wood Products segment experienced a decrease in sales to $237 million, but improved its operating loss to $2 million from $18 million in the previous year.

The company’s balance sheet as of March 31, 2025, showed total assets of $7.31 billion, a slight decrease from $7.32 billion at the end of 2024. Long-term debt, including current portions, was reported at $2.63 billion, down from $2.63 billion at year-end. Domtar continues to manage its liquidity through its ABL Revolving Credit Facility, which was amended to increase availability to $1.14 billion, with $648 million remaining available as of the end of the quarter.

Looking ahead, Domtar anticipates stable demand and pricing for paper products, with improvements expected in pulp demand and pricing. The company remains focused on controlling costs and generating cash flow while navigating the impacts of recent tariffs imposed by the U.S. on imports, which could affect its competitive position and overall financial performance.