Resolute Forest Products chief executive Yves Laflamme will retire next year and be replaced by chief financial officer Remi Lalonde, the company announced Thursday.
The forestry company says Laflamme will step down on March 1, 2021, at which point Lalonde will join the board of the Montreal-based lumber, paper and tissue maker.
Resolute credits Laflamme with overseeing its expansion in the tissue business and in the southern U.S., as well as the company's move toward more sustainable materials.
“Yves reinforced Resolute's vision and values, focusing on safety, sustainability, profitability, accountability and teamwork. His commitment to continuous improvement, particularly in the area of costs, serves as a model to the entire organization,” board chairman Bradley Martin said in a statement.
Resolute says the search is now on for a new CFO to replace Lalonde, a lawyer by training who joined the company 11 years ago and went on to lead operations at the pulp, paper and power plant in Thunder Bay, Ont. Lalonde will take charge of the 7,000-person company as lessening demand for paper changes the forestry industry.
“Remi has very good relationships with our stakeholders, sharp analytical skills, impressive credentials and a strong business drive,” Martin said.
The announcement came as Resolute reported third-quarter financial results this morning, swinging to a profit after posting a loss in summer 2019.
The company says it earned net income of $57 million, or 66 cents per diluted share, on sales of $730 million in the three months ending Sept. 30.
The results were up compared with the year-ago period, when Resolute posted a loss of $43 million, or 47 cents per share, on sales of $705 million.
Laflamme attributed the turnaround to rallying lumber prices over the summer and profits from tissue sales, despite weaker demand for paper products like newspapers, inserts and flyers.
The company’s shares rose more than 2.8 per cent to $6.56 apiece on Thursday, despite results that fell short of analyst expectations. Analysts surveyed by Refinitiv expected earnings of 77 cents per share on revenue of $778 million.
The paper business, which was already under pressure before the pandemic, is recovering more slowly, Laflamme said. While tissue flew off the shelves at retailers this year, corporate orders have been somewhat middling, he added.
But strong lumber demand helped Resolute, as transaction prices for wood rose 57 per cent. The company also recently acquired U.S. sawmills, and plans to reopen a sawmill in Arkansas soon to keep up with demand.
Despite a volatile year for lumber prices, Laflamme was confident in the company’s outlook.
“Together with our strong Canadian lumber business, the well-timed acquisition of U.S. sawmills positioned us well for the recent spike in lumber prices,” said Laflamme.
“Although market prices have come off their highs in recent weeks, the demand from the repair and remodelling sector as well as robust U.S. housing starts speak to strong market fundamentals.”
This report by The Canadian Press was first published Nov. 5, 2020.
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Anita Balakrishnan, The Canadian Press