Business

TORONTO - The TSX Venture Exchange was ahead 11.66 points to 1,422.28 on Friday. The volume at 4:30 p.m. was 183.95 million shares.

Among the most active companies, Sidon International Resources Corp. (TSXV:SD) gained 2.5 cents to 16 cents, Gold Bullion Development Corp. (TSXV:GBB) three cents to 58 cents; Buchans Minerals Corp. (TSXV:BMC) 1.5 cents to 3.5 cents.


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TORONTO - Some of the most active companies traded Friday on the Toronto Stock Exchange and the TSX Venture Exchange:

Toronto Stock Exchange (11,713.43 down 15.21 points):

Osisko Mining Corp. (TSX:OSK). Miner. Up 31 cents, or 2.44 per cent, at $13 on 9,883,900 shares. The metals and mining sector led the losers on the TSX, dropping 0.84 per cent.

Manulife Financial Corp. (TSX:MFC). Insurer. Down three cents, or 0.18 per cent, at $16.34 on 8,085,772 shares. The financial sector dipped 0.48 per cent.

Brookfield Properties Corp. (TSX:BPO). Real estate. Down 54 cents, or 3.37per cent, at $15.50 on 4,786,855 shares. The company is selling its residential land and housing business in the United States and Canada as part of the plan to become a pure-play office property company.

Suncor Energy Inc. (TSX:SU). Oil and gas. Down two cents, or 0.06 per cent, at $33.89 on 3,668,401 shares. The energy sector slipped 0.40 per cent, despite a 59-cent hike on the September crude contract on the New York Mercantile Exchange. Oil futures closed at US$78.95 per barrel.

Research In Motion (TSX:RIM). Hardware. Up $1.47, or 2.55 per cent, at $59.15 on 3,278,824 shares. The inventor of the BlackBerry has overtaken Sony Ericsson to claim the No. 4 spot in a ranking of the world's top mobile phone makers.

Western Coal Corp. (TSX:WTN). Miner. Down eight cents, or 1.87 per cent, at $4.20 on 3,022,756 shares.

TSX Venture Exchange (1,427.36 up 5.07 points):

Sidon International Resources Corp. (TSXV:SD). Metal ore mining. Up 2.5 cents, or 18.52 per cent, at 16 cents on 9,660,520 shares.

Gold Bullion Development Corp. (TSXV:GBB). Mining explorer/developer. Up three cents, or 5.45 per cent, at 58 cents on 4,549,009 shares.

Companies reporting major news:

Domtar Corp. (TSX:UFS). Forestry. Up $4.72, or 8.50 per cent, at $60.24 on 186,777 shares. Second-quarter revenue at the pulp and paper producer was up sharply but its overall profit decreased as a result of a loss on the sale of its wood business and a series of one-time items.

George Weston Ltd. (TSX:WN). Grocery chain. Down 79 cents, or one per cent, at $78.51 on 62,967 shares. The Toronto-based parent of the Loblaw (TSX:L) grocery store chain reported a second-quarter profit of $125 million, well ahead from year-earlier net earnings of $4 million, on improvements in operating performance at both its grocery store and baked goods divisions.


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MONTREAL - Domtar said it is coming off its best ever operating quarter poised to take advantage of opportunities to grow its business despite anticipated pressure on paper shipments and pulp selling prices.

"We have a positive outlook for the third quarter," president and CEO John Williams said during a conference call.

"We're confident that our financial strength will position us well to take advantage of other opportunities to create shareholder value."

The Montreal-based pulp and paper producer expects paper shipments in the current quarter will be unchanged from the second quarter, before gradually declining to year-end due to usual seasonal factors.

It plans to adjust production to minimize building up inventories of pulp as prices are expected to fall from recent substantial increases.

Domtar (TSX:UFS), which reports in U.S. dollars, recorded an all-time high adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $264 million in the second quarter. That compared to US$118 million in the year ago period and $234 million in the prior quarter.

The company benefited from strong prices in all its businesses, which helped it to generate $610 million in cash from operations.

The results caused its shares to surge on the Toronto Stock Exchange, closing up 8.5 per cent or C$4.72 at C$60.24.

The company's paper segment enjoyed a moderate recovery in several of the markets that use its products, including improved demand in advertising and direct marketing.

However, copier paper has yet to experience a significant boost in demand because of weak office employment in the United States.

Overall sales increased by 17 per cent to $1.55 billion compared with the same quarter last year.

Including a series of one-time items, Domtar earned $31 million, or 71 cents per share, in the period ended June 30. That was down from $48 million or $1.12 per share a year earlier, and $58 million or $1.34 in the March quarter.

During the second quarter, the company recorded a $50-million loss on the sale of its wood business to EACOM Timber Corp.

Other one-time charges included $40 million ($24 million after tax) for its debt repurchase; $14 million ($9 million after tax) related to the impairment and write-down of assets; $5 million ($4 million after tax) in closure and restructuring costs; and $2 million gain on asset sales.

Adjusting for these items, the company earned $116 million in the second quarter, compared to $33 million a year ago, and $69 million in the first quarter.

"Clearly this was another very strong quarter in a steady market environment. We executed well both from an operational and financial perspective...," he told analysts.

Williams said the company continues to streamline its operations by exiting the coated groundwood paper business and selling its wood operations.

It also announced a partnership to develop fibre-based nanotechnologies.

Domtar's paper segment had $1.3 billion of sales in the quarter and delivered $149 million in operating income. That compared to $1.13 billion of sales a year ago and $150 million in income.

Compared to the prior quarter, paper shipments decreased by seven per cent while pulp shipments increased by 25 per cent.

Adjusted operating profits increased by 20 per cent due to higher selling prices in both products and increased pulp shipments, partially offset by increased costs for maintenance down time, lower paper shipments and unfavourable currency exchange.

Domtar received $368 million in alternative fuel tax credits during the quarter and expects to generate up to $200 million of tax credits ($120 million after tax) because of a new black liquor tax credit announced in late June

The company generated 200 million gallons of the alternative fuel last year.


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TORONTO - Brookfield Properties Corp. plans to sell its residential real estate assets and focus on buying up office towers around the world, beginning in Australia where it will buy a portfolio of properties from its parent company for US$1.4 billion.

The New York-based company will change its name to Brookfield Office Properties under the reorganization announced Friday.

Brookfield Properties (TSX:BPO), which is 51 per cent owned by Brookfield Asset Management of Toronto (TSX:BAM.A), plans to sell its North American residential holdings to Brookfield Homes (NYSE:BHS), which will gain a presence in Alberta, Colorado and Texas.

Brookfield Asset Management spokeswoman Katherine Vyse said the sale of its Australian office properties streamlines operations.

Brookfield Properties will add an interest in 16 office properties in Sydney, Melbourne and Perth to a portfolio that includes Brookfield Place in Toronto, Bankers Hall in Calgary and the World Financial Centre in Manhattan.

"(The portfolio) expands our geographic footprint into attractive new markets. And assembling a similar portfolio and platform over time would be much more costly difficult, if not impossible to replicate," Brookfield Properties president and CEO Ric Clark told a conference call with analysts.

The Australian market has a well-balanced supply and demand dynamic, and the potential for spiking rental rates in the coming years, while high quality assets in Canada are hard to come by, Clark said.

Scotiabank real estate economist Adrienne Warren said it is a good time for real estate investors to diversify portfolios internationally, and Australia is a top performer in the global market.

"The (Australian) economy has been extremely strong," Warren said.

"It benefits from its close ties with the booming markets of Asia ... also its banking system is one of the few, along with Canada, that held up quite well through all the problems that we've seen."

There is also a shortage of properties in Australia which tends to push up prices, Warren said.

Brookfield isn't alone in searching out global acquisitions as prospects in the Canadian market remain scarce. Last month, real estate trust RioCan said it was turning its attention to acquiring property in the U.S., particularly Texas.

As part of the change, Brookfield Properties plans to sell Carma Developers, its residential property arm to Brookfield Homes Corp. (NYSE:BHS) that already has holdings in California and Washington, D.C.

The deal has yet to be negotiated, but Clark said he hopes it will close by the end of the year.

Brookfield Asset Management, a large Canadian conglomerate formerly known as Brascan, is also active in power generation, forestry-related companies and asset management. It owns 51 per cent of Brookfield Properties and 82 per cent of Brookfield Homes. BAM has a market value of nearly $15 billion.

The Australian properties being transferred from to Brookfield Properties are 99 per cent leased.

Brookfield Properties will fund the transaction through available liquidity and from a $750 million loan from BAM, which could be repaid through asset sales, potentially of its equity interest in Brookfield Office Properties Canada or other financing activities.

The transaction is expected to be completed in the third quarter of this year.

Brookfield Asset Management shares lost 10 cents to close at C$25.78 in Toronto while Brookfield Properties stock lost 54 cents to $15.50. In New York, Brookfield Homes shares gained 12 cents to $7.45.


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