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Guest Dazel

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Agreed.  No more harping on lack of (comprehensive) website presence ... they even posted an investor presentation. ;-) 

 

Now we wait until wednesday to see how Q410/FY10 closed, and start to get sense of what Q1 holds.  Results for Q1 will be impacted by strengthening of $CDN, but that should be offset if NBSK pricing pushes back up, and as volumes increase due to efficiencies gained from installation of new press during the Q4/10 mtnc cycle.  Key metric for me remains EBITDA/cash from operations ... as balance sheet transforms from PPE valuation to cold, hard cash (and/or lack of debt).

 

I wonder how long it will be until an announcement is made regarding repurchase of the remaining ~$25M in convertible debentures?  The optimist in me hopes for announcement in early Q2 (or with Q1 results announcement), coincident with an announcement to initiate modest share buyback and/or dividend.

 

Did anyone notice that ABH filed much improved operating results for Q4/10 ...

  http://www.montrealgazette.com/AbitibiBowater+shows+operating+profit/4321527/story.html

 

Also, that ABH is FFH's second largest equity holding (after JNJ) ...

  http://www.gurufocus.com/news.php?id=123035

 

Things that make you go Hmmm ...

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Finally .... we have some intelligent investor relations.

Money well spent.

 

Keep thinking that they would not have this investor presentation out, before the earnings release, unless they have something very good to say. They would also not be making references to competitors, if they could not sustain the reported EBITA (& on either an ongoing, or capitalized sale basis).

 

Looking forward to hearing what they have to say.

 

SD

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Thanks for the link.

 

Question: Why would Scotia and Dundee both release new price targets for Fibrek the day before the earnings release?  Dundee increased their's from 90 cents to $1. (recommends a sell) and Scotia downgraded to Sector Underperform and a price target of $1.30.  I am not commenting on the value of their estimates but more with the timing.  I just don't see the value in releasing this hours before the earnings release.  Hours afterwards makes sense....but before?

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Darn good question Watcher. Since they could not have prior access to the results perhaps they have a crystal ball. This doesn't even look good. I mean, if you weren't absolutely sure of the results why would you take the chance of looking like idiots if the results were different? I mean what's the downside of waiting a few hours? I just don't understand the timing. There are a lot of knowledgable shareholders on this board who have done a lot of research on FBK and it makes one uncomfortable to think that Scotia and Dundee know so much more than the shareholders. On the other hand these guys have been off before. 

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Darn good question Watcher. Since they could not have prior access to the results perhaps they have a crystal ball. This doesn't even look good. I mean, if you weren't absolutely sure of the results why would you take the chance of looking like idiots if the results were different? I mean what's the downside of waiting a few hours? I just don't understand the timing. There are a lot of knowledgable shareholders on this board who have done a lot of research on FBK and it makes one uncomfortable to think that Scotia and Dundee know so much more than the shareholders. On the other hand these guys have been off before. 

 

I am more concerned as they have been right before. 

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"I am more concerned as they have been right before."

 

Agreed. I can't really believe that they would be dumb enough to downgrade them just hours before the release if they didn't know something. But on the other hand isn't it a little odd to downgrade them at the same time as they raise the target price?

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the actual release is too long to post but here is the highlights:

 

http://ca.finance.yahoo.com/news/FIBREK-REPORTS-RECORD-SALES-cnw-1712888253.html?x=0

 

(full link above)

 

Fibrek earns $7.78-million in 2010

Ticker Symbol: C:FBK

Fibrek earns $7.78-million in 2010

Fibrek Inc (C:FBK)

Shares Issued 130,075,556

Last Close 2/23/2011 $1.55

Wednesday February 23 2011 - News Release

Mr. Patsie Ducharme reports

FIBREK REPORTS RECORD SALES AND STRONG EBITDA FOR 2010

Fibrek Inc. is releasing results for the three months and year ended Dec. 31, 2010. All dollar amounts are in Canadian dollars unless otherwise stated.

Compared to 2009:

• Sales grew 43% to a record $556.5 million

• --EBITDA increased by $73.7 million from negative $11.9 million in 2009, EBITDA margin at 11.1%

• --Net earnings increased by $87.0 million from a net loss of $79.2 million in 2009

Compared to the fourth quarter of 2009:

• --Sales grew 14%

• --EBITDA increased $5.7 million, despite major maintenance and capital work performed at the Saint-Félicien and Fairmont mills

• --Net earnings were up $11.2 million

Highlights:

• --Conversion to corporate structure

• --Strong balance sheet following refinancing of long-term debt

• --Gain of $5.5 million on settlement of a claim with AbitibiBowater Inc.

• --New corporate strategy approved by board of directors

• --Preparation of the Saint-Félicien mill to transition from 14 to 10 days of scheduled shutdown, effective in 2011

 

 

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Imagine if they didn't have the $5.5 Million gain on the Abitibi claim.  ::)

 

With the strong dollar, Q1 will likely be worse without this one time gain.

 

 

Depending on what the extra transition costs were to move it from a 14 to 10 day of scheduled shutdown.

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I've run this through a translator (the initial French language link is below) so forgive the grammar but it sounds like they're considering something to help sell the RBK.  Can't we just sell the company rather than double down on RBK?

 

After a happy new year 2010, Fibrek wants to diversifying its activities

The Canadian Press. affaires.com. 23-02-2011

After experiencing a happy new year 2010, pulp producer Fibrek prepares to diversify by investing in new areas.

Quebec-based company would like to especially engage in the manufacture of tissue paper like toilet paper and tissues.

In a telephone interview Wednesday, President and CEO of Fibrek, Pierre Gabriel Côté, indicated that the company was considering to make an acquisition in this area, enter into a partnership with an established business or invest in a factory.

"Really believed the addition of recycled tissue paper fibre and is super well positioned to deliver it to market", explained Mr. Côté.

Fibrek will be able to take advantage of his "leadership" in the sector for Kraft recycled at the United States, submitted the leader. The company has two factories for the manufacture of this product: one in Michigan and West Virginia.

 

 

 

http://www.lesaffaires.com/secteurs-d-activite/transport-et-produits-industriels/apres-une-bonne-annee-2010-fibrek-veut-diversifier-ses-activites/525029

 

 

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Wow, the result looks crap at the first glance.  Will need to know why the cost up so much - I think it's probably a one time thing (5 millions for the machine + 4 millions for regular capex on shut down) - need to check out the actual filing which isn't available yet. (Hope they not paying too much on the new website and email alerts.)  :D

 

 

Production was the low due to long shut down. Q1 production should be back up to 140-150m range.

 

Positive - finally see the # on the power generation. 6m per year. Not too shabby for 20millions out of pocket expense. If we net out the receivable and inventories, they are on schedule to be debt free year end.  EBITA of about ~70millions should easily translate to $3 share price.

 

 

Why the cost up so much? They should be more explicit.

 

 

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I have not looked at the details yet, but I assume that RBK is a disaster once again explaining the weak Q4 results.

 

Now they want to blow cash on acquisitions to fight with a Cascades in recycled tissue.... WTF! If that is the best idea that these guys can come up with then they need to be removed. Prem & Co. please help us!

 

Cardboard

 

 

 

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Once again I need to do my homework but, didn't we have a discussion last quarter about production being shuffled from Q3 to Q2, adjustments in inventories and the like? Another one time in Q4?

 

In any case, making any kind of acquisition after the near death experience is a no no. The CEO needs to hear that loud and clear. You sell the company/parts of it or you figure a way to make more with what you got. The former CEO tried to prove himself with a big acquisition or with a business that they did not understand fully and see what happened.

 

Until debt is paid in full, that the pension shows over-funded status and that we have a large pile of cash left, acquisitions are a no no. And I want our biggest shareholder to sign off on it.

 

Cardboard

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Attached is a spreadsheet comparing FBK and MERC 2010 results.

 

MERC has more energy sales, but even removing the energy sales and leaving the costs their EBITDA is 10% better than FBK. FBK's operations do not seem seem to be very efficient or MERC's sales mix is much more profitable (?).

 

If I were running the operation I would focus on improving existing operations before heading in a different direction.

 

Am I missing something?

 

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Its hard to tell whats going on from this press release.  The MD&A should have a better view of the overall financial position in terms of the revolver, and the cash flow.  At first glance the results looked ugly but there are several stepwise things that are changing the face of the company.  No big acquisitions, please, please, please....

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