Brascade Corporation
TSX : BCA.PR.B

August 14, 2006 16:57 ET

Brascade Corporation Announces Second Quarter Results

TORONTO, ONTARIO--(CCNMatthews - Aug. 14, 2006) - Brascade Corporation (TSX:BCA.PR.B) today announced net income for the six months ended June 30, 2006 of $6.0 million, compared to income of $505.5 million for the same period last year. The 2005 results included $359.4 million in gains from the restructuring and partial monetization of Brascade's investment in the mining and metal sector, net of tax and other non-cash items. The 2005 results also included a contribution from that investment, which was substantially sold during the third quarter of 2005. The results for the first six months of 2006 reflect a loss incurred in the company's paper investments.

Net income for the three months ended June 30, 2006 was $15.8 million, compared to net income of $433.1 million in the same period in 2005, which included the above-mentioned restructuring and monetization gains.

Following the sale of substantially all of Brascade's interest in Falconbridge Limited in August 2005, the company no longer records any equity income from mining and metals investments. These investments contributed $76.2 million for the first six months of 2005.

Forest product investments contributed a net loss of $10.6 million for the first six months of 2006, compared with income of $50.1 million for the same period last year. Panelboard investments contributed income of $33.9 million, which was a strong performance but lower than the same period of 2005 as oriented strandboard prices came off their record high levels. Paper investments generated a loss of $44.5 million, arising mainly from closure of a pulp mill in New Hampshire and the writedown of an investment in a US paper company.

The company's Board of Directors declared the regular quarterly dividends on its Senior Preferred Shares, Series B payable on September 30, 2006 to shareholders of record on September 20, 2006.

Brascade Corporation currently holds investments in the forest products and property sectors. The common shares of Brascade are wholly owned by Brookfield Asset Management Inc., an asset management company focussed on property, power and infrastructure assets.

Edward C. Kress, Chairman and President, will be available at 416-363-9491 to answer any questions on the company's financial results.

This news release contains forward-looking statements concerning the company's business and operations. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and the company's actual results could differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Information Form for a description of the major risk factors.



Consolidated Statement of Operations
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(unaudited)
US$ millions, except Three months ended Six months ended
per share amounts June 30 June 30
2006 2005 2006 2005
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Income
Equity income from Falconbridge
Limited $ - $ 33.6 $ - $ 76.2
Equity income from Norbord Inc. 12.3 20.9 33.9 51.1
Equity loss from Fraser Papers Inc. (9.3) (2.3) (44.5) (1.0)
Foreign exchange gain (loss) (12.7) 10.2 (9.1) 15.2
Other income 52.4 38.8 61.7 43.3
Gain on disposition of investment - 359.4 - 359.4
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42.7 460.6 42.0 544.2
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Expenses
Interest expense 26.6 27.3 35.6 38.5
Corporate 0.3 0.2 0.4 0.2
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26.9 27.5 36.0 38.7
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Net income $ 15.8 $ 433.1 $ 6.0 $ 505.5
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Net income per common share $ 0.34 $ 17.32 $ 0.13 $ 20.22
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Consolidated Statement of Deficit
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(unaudited) Three months ended Six months ended
June 30 June 30
US$ millions 2006 2005 2006 2005
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Deficit, beginning of
period $ (341.1) $ (936.4) $ (331.3) $(1,008.8)
Net income for the
period 15.8 433.1 6.0 505.5
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Deficit, end of period $ (325.3) $ (503.3) $ (325.3) $ (503.3)
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Consolidated Balance Sheet
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June 30 December 31
US$ millions 2006 2005
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(unaudited)
Assets
Loans receivable $ 563.7 $ 214.8
Securities 90.9 434.9
Investment in Norbord Inc. 176.1 199.3
Investment in Fraser Papers Inc. 154.0 196.9
Investment in Canary Wharf Group, plc 342.3 342.3
Other assets 30.4 -
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$ 1,357.4 $ 1,388.2
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Liabilities
Accounts payable $ 168.1 $ 217.4
Retractable preferred shares 484.6 478.2
Shareholders' equity 704.7 692.6
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$ 1,357.4 $ 1,388.2
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Contact Information

  • Brascade Corporation
    Edward C. Kress
    Chairman and President
    (416) 363-9491