Watching my home town suffer...

Lower Sales, Lumber Dispute Deepen Doman Losses

DUNCAN, British Columbia, (Reuters) - Forest products company Doman Industries Ltd. on Monday reported wider first-quarter losses due to lower pulp and lumber sales and the impact of the softwood lumber dispute between Canada and the United States.

The company, based in Duncan, British Columbia, said it was looking to restructure debt or sell off assets. It reported a net loss of C$39.4 million, or 95 Canadian cents a share, in the first quarter, compared to a net loss of C$45.1 million, or C$1.09 per share in the same quarter last year.

First-quarter sales fell to C$131.7 million, from C$219.9 million in the first quarter of 2001.

The company, which had struggled with debt even before the United States imposed duties and anti-dumping fines on Canadian softwood lumber shipments, had its ratings downgraded by Moody's Investor Service to "junk" status in March after it delayed interest payments on C$388 million debt in 8.75 percent unsecured notes.

It said the dispute had forced it to take "extensive downtime" in its lumber and sawmills operations during the first quarter.

"As a result of the negative impacts of the softwood lumber dispute, weak pulp markets and our high debt levels, the Company is conducting a strategic review of alternatives including, among other things, asset divestitures and restructuring of its indebtedness," it said.

Doman stock traded at 30 Canadian cents in Toronto on Monday, well down from its 12-month high of 92 Canadian cents.

--Reuters, Monday May 6 11:10 PM EST