April 24, For Immediate Release NORSKE SKOG CANADA REPORTS CONTINUED STRONG EARNINGS

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1 April 24, 2001 For Immediate Release NORSKE SKOG CANADA REPORTS CONTINUED STRONG EARNINGS Vancouver, B.C. Norske Skog Canada today announced net earnings of $32.4 million, or 26 cents per share, for the three months ended, 2001, compared to net earnings of $23.2 million, or 19 cents per share, for the same quarter a year earlier. Excluding unusual items, net earnings for the quarter of $42.4 million, or 34 cents per share, improved by $19.2 million, or 15 cents per share, from the same quarter last year. The results for the quarter include an expense of $19.0 million after tax, or 15 cents per share, for the write-down of the asset value of the company s Mackenzie pulp facility, partially offset by the recognition of $9.0 million, or seven cents per share, in tax-loss benefits. Sales were $364.2 million in the quarter, up from $331.0 million for the same quarter last year. Cash flow from operations was $65.7 million, compared to $72.9 million in the same quarter one year ago. The company s cash and short term investments increased by $31.7 million to $961.4 million at the end of the quarter. Operating earnings for the newsprint and specialties printing papers segment of $37.3 million increased by $5.7 million from the previous quarter s operating earnings of $31.6 million. President and chief executive officer Russell Horner said this represents the highest quarterly operating for this segment in five years. Average newsprint and groundwood specialty paper sales realizations were approximately $35 per tonne higher than in the preceding quarter, benefiting from higher prices and strengthening in the U.S. dollar at period end. The company closed 2000 with historically low newsprint and groundwood specialty paper inventories, and entered 2001 with minimum working inventory levels, Horner said. Paper shipment levels were down by 22,000 tonnes from the previous quarter, but were only 7,000 tonnes below production. Manufacturing cash costs were unchanged from the previous quarter despite slightly higher energy costs and production being lower by 9,000 tonnes, Horner added. Newsprint demand eased to some extent during the quarter as a result of a softening in paper consumption in the United States and a decline in exports. The company is curtailing newsprint production at its two printing paper facilities by approximately 22,000 tonnes in the second quarter to balance orders and production, Horner said. A newsprint price increase of US$50 per tonne in the company s main western North American market was implemented on March 1. There has, however, been resistance to this increase in light of weakening demand. Another major supplier has announced today a price reduction of US$25 per tonne on May 1, and it is our intention to match that decrease, Horner said. Depending on basis weight, a US$40 to US$42.50 per short ton price increase for the company s soft-nip calendered paper took effect March 1. The company anticipates steady demand for its groundwood specialty paper products as a result of stable conditions in this segment of the market, Horner noted. Operating earnings for the pulp and containerboard segment of $19.9 million decreased by $5.7 million from the previous quarter. Scheduled annual maintenance and market-related curtailment reduced pulp production by 3,000 tonnes and 23,000 tonnes, respectively. This compares to scheduled annual maintenance and market-related curtailment of 18,000 tonnes and 24,000 tonnes, respectively, in the previous quarter. Both fibre costs and energy costs increased by approximately $5 per tonne for pulp and containerboard production. Pulp sales volume increased

2 - 2 - by 32,000 tonnes from the preceding quarter, and exceeded production by 16,000 tonnes. Average pulp and containerboard sales realizations were approximately $125 per tonne lower than three months earlier. Softening worldwide demand for market pulp, particularly in Asia, resulted in weaker market conditions during the quarter, Horner said. Industry operating rates exceeded demand and inventories increased by approximately 165,000 tonnes during the quarter. Pulp prices declined in all markets and by the end of the quarter were lower than December 2000 levels by approximately US$60 per tonne in the United States, US$90 per tonne in Europe, and US$110 per tonne in Japan. The U.S. pulp market has been the most stable, with prices exceeding those in Asia and Europe. Spot market prices continued to decline and remain below list price levels. The company expects pulp markets to remain under pressure in the near term, but a seasonal pickup in demand and industry production curtailment should result in lower inventory levels in the second quarter of 2001, Horner said. The company is cautiously optimistic that an improvement in the supply/demand balance for market pulp will develop in the second half of 2001, Horner noted. Containerboard market conditions remain favourable with demand and pricing relatively stable. Horner said the uncertain economic outlook reinforces Norske Skog Canada s resolve to continue to simplify its business processes, and achieve superior financial and operational performance throughout the company. The proposed acquisition of Pacifica Papers Inc. and the sale of the company s Mackenzie pulp mill to Pope & Talbot Inc. represent a unique opportunity to create a strong enterprise capable of delivering superior shareholder returns and to be well positioned to grow, Horner added. The company s board of directors today declared a cash dividend of 15 cents per share, payable June 15, 2001 to shareholders of record on June 4. For further information, contact: Ralph Leverton Stuart Clugston Vice-President, Finance, Vice-President, Corporate Affairs Chief Financial Officer and Secretary 1 (604) (604)

3 NORSKE SKOG CANADA LIMITED Consolidated Statements of Earnings Net sales $ $ Operating expenses Cost of products sold Selling and administrative Depreciation Operating earnings Other income (expense) (note 1) (29.3) 0.6 Interest income Earnings before income taxes Income taxes (note 1) Net earnings $ 32.4 $ 23.2 Basic and fully diluted earnings per share (in dollars) $ 0.26 $ 0.19 Class A common shares outstanding (millions) Consolidated Balance Sheets (in millions of dollars) unaudited Assets 2001 As at December Current assets Cash and short term investments $ $ Accounts receivable Inventories Prepaid expenses , ,409.8 Fixed assets 1, ,298.5 Other assets Liabilities and shareholders equity $ 2,710.1 $ 2,720.6 Current liabilities Accounts payable and accrued liabilities $ $ Employee future benefits Future income taxes Deferred credits Shareholders equity Share capital 1, ,262.6 Retained earnings , ,165.2 On behalf of the board $ 2,710.1 $ 2,720.6 Director Director

4 Consolidated Statements of Cash Flows NORSKE SKOG CANADA LIMITED Cash provided by (used for) Operations Net earnings $ 32.4 $ 23.2 Items not requiring (providing) cash Depreciation Income taxes Employee future benefits 1.4 (1.6) Other Change in non-cash working capital (53.3) 5.5 Cash provided by operations Per share (in dollars) $ 0.53 $ 0.59 Investment Additions to fixed assets (15.8) (7.4) Proceeds from sale of fixed assets 0.2 Decrease in other assets (15.4) (5.4) Financing Dividends paid (18.6) (18.6) Increase in cash Cash at beginning of period Cash at end of period $ $ Supplemental information Income taxes paid $ 1.2 $ 0.6 Segmented Information Net sales Newsprint and specialties $ $ Pulp and containerboard Less: Inter-segment sales of pulp (22.5) (17.6) $ $ Operating earnings (loss) Newsprint and specialties $ 37.3 $ (9.1) Pulp and containerboard $ 57.2 $ 29.4 Depreciation Newsprint and specialties $ 15.4 $ 15.6 Pulp and containerboard $ 29.1 $ 28.8 Shipments - M tonnes Newsprint and specialties Market pulp* Containerboard Production - M tonnes Newsprint and specialties Market pulp Containerboard *Shipment and production volumes for market pulp exclude inter-segment sales of pulp.

5 NORSKE SKOG CANADA LIMITED Consolidated Statements of Retained Earnings Balance, beginning of period $ $ Net earnings Dividends (18.6) (18.6) Balance, end of period $ $ Notes to the Consolidated Financial Statements (tabular figures in millions of dollars) unaudited 1. Significant Accounting Policies The statements have been prepared consistent with the accounting policies described in the audited consolidated financial statements for the fiscal year ended December 31, Interim financial statements do not include all disclosures required for annual financial statements by Canadian generally accepted accounting principles, and accordingly these interim financial statements should be read in conjunction with Norske Skog Canada Limited s most recent annual consolidated financial statements Unusual Income (Expense) Other Expense Write-down of Mackenzie pulp operations $ (30.0) $ Income Taxes Recovery on write-down of Mackenzie pulp operations 11.0 Amortization of deferred credits on utilization of acquired tax losses Net earnings effect $ (10.0) $ Net earnings effect per basic and fully diluted share $ (0.08) $ On March 29, 2001, the Company entered into an agreement to sell the Mackenzie pulp operations. The agreement is expected to close on or around May 31, The Company has written down the assets of the Mackenzie pulp operations by $30.0 million based on the estimated net proceeds on the sale. The write-down is based on the trading price of the purchaser s shares, to be received in partial payment, as at, 2001 and management estimates. Actual results could differ. 3. Derivatives The Comp any uses options and forward contracts to hedge a portion of its future U.S. dollar revenues. Options and forward contracts outstanding as at, 2001 are as follows: Maturity Forward Contracts US$ Amount C$ Rate US$ Amount Floor Minimum C$ Rate Options US$ Amount Ceiling Maximum C$ Rate Fiscal 2001 $ $ $ Fiscal Fiscal Comp arative Figures Certain figures for previous periods have been reclassified to conform with the current period s presentation. 5. Subsequent Events On March 25, 2001, the Company announced that it plans to acquire Pacific Papers Inc. ( Pacifica ). The acquisition is subject to approval by Pacifica shareholders and certain regulatory authorities. In addition, the Company announced it intends to pay a special distribution of $12.00 per share for each currently issued Class A common share of the Company. The special distribution

6 is subject to the approval of the Company s shareholders.