Abitibi-Consolidated Inc., which plans to merge with Bowater Inc. to help get back in the black, said Tuesday it lost $70 million in the first quarter.

The Montreal-based forest products company said it lost 16 cents a share in the quarter. In the same quarter of last year, the company lost $33 million, or eight cents a share.

Abitibi 3-month stock chart

Abitibi said its most recent results included a $29-million foreign exchange gain, mostly related to the company's long-term debt denominated in U.S. dollars, plus an $8-million favourable tax adjustment and a charge of $8 million for merger and integration-related costs.

The company's newsprint business had operating profit of $5 million, while its commercial printing papers unit lost $9 million and its wood products segment lost $35 million.

Overall sales at the company slipped to $1.07 billion from $1.24 billion a year earlier.

"Deteriorating conditions in most markets provided significant challenges for the company during the quarter," John Weaver, the firm's president and CEO, said in a release.

"The situation does, however, underscore the strategic rationale and timing for our merger with Bowater. Together, our two companies will be stronger and better-equipped to compete in the fiercely competitive global marketplace," he said.

Abitibi and Bowater unveiled their proposed merger on Jan. 29, telling investors at that time their union would result in the third-largest publicly traded paper and forest products company in North America.

The Abitibi-Bowater merger is expected to be finished in the third quarter of this year.

Shares of Abitibi finished with a loss of three cents at $2.858 on the TSX.