VANCOUVER, BC, May 1, 2024 - Canfor Corporation ("The Company" or "Canfor") (TSX: CFP) today reported its first quarter of 2024 results:
Overview
- Q1 2024 operating loss of $86 million; shareholder net loss of $65 million, or $0.54 per share
- Sustained pressure on global lumber markets and pricing, especially for Southern Yellow Pine ("SYP")
- Solid earnings from Europe; US South results directly impacted by weak SYP lumber pricing; Western Canadian results remained challenging despite uplift in Western Spruce/Pine/Fir lumber pricing
- Modest uptick in NBSK pulp unit sales realizations, 7% increase in pulp production quarter-over-quarter
- Continued execution of the Company's US South growth strategy with the announced agreement to acquire the El Dorado lumber manufacturing facility in Arkansas, as well as plans to optimize the Company's Alabama operational footprint
- Ongoing constraints accessing economically viable fibre in British Columbia impacting lumber and pulp operating rates in the near-term and through the balance of 2024
The Company reported an operating loss of $85.8 million for the first quarter of 2024, compared to an operating loss of $191.3 million in the fourth quarter of 2023. After taking into consideration a net $30.2 million reversal of a previously recognized inventory write-down, the Company's adjusted operating loss was $116.0 million for the first quarter of 2024, compared to a similarly adjusted operating loss of $232.4 million for the fourth quarter of 2023. These results largely reflected an improvement in the lumber segment.
Commenting on the Company's first quarter results, Canfor's President and Chief Executive Officer, Don Kayne, said, "Although global lumber markets remained under pressure in the first quarter, especially Southern Yellow Pine, our global lumber footprint helped mitigate some of these market-related pressures, as our European operations delivered positive results and our Western Canadian operations benefited from an uplift in Western Spruce/Pine/Fir lumber pricing. Going forward, we anticipate the benefits of our global diversification strategy to be further enhanced by our acquisition of the El Dorado sawmill in Arkansas, as well as the optimization of our Alabama facilities. In British Columbia, the operating conditions remain challenging, as we continue to face persistent constraints associated with a lack of economically viable fibre."
"For our pulp business" added Kayne, "generally balanced global softwood pulp market conditions and steady pulp production led to a modest uplift in our pulp business results quarter-over-quarter. Our pulp operations, however, continue to navigate a constrained fibre supply environment both in the short and long-term."
Source: Canfor
