Canfor Pulp annouces 2021 and fourth quarter of 2021 results

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VANCOUVER, BCMarch 1, 2022 - Canfor Pulp Products Inc. ("The Company" or "CPPI" or "Canfor Pulp") (TSX: CFX) today reported its 2021 and fourth quarter of 2021 results1:

Overview

  • 2021 operating income before adjusting items of $32 million; adjusted net income of $25 million, or $0.38 per share
  • Fourth quarter of 2021 adjusted operating loss of $41 million; adjusted net loss of $32 million, or $0.49 per share
  • 2021 includes an impairment charge of $95 million or $1.06 per share, resulting in a reported operating loss of $66 million for the year, net loss of $44 million or $0.68 per share; fourth quarter of 2021 reported operating loss of $137 million, net loss of $101 million or $1.55 per share
  • Available liquidity of $170 million at December 31, 2021

Following the many challenges driven by the onset of the coronavirus outbreak ("COVID-19") in 2020, Canfor Pulp experienced improved results in 2021, primarily reflecting the strengthening of global pulp market fundamentals in the first half of the year which more than offset the impacts from extreme weather conditions in British Columbia ("BC") on supply chain and operations, production downtime and global pulp market weakness in the latter part of the year. At the end of the 2021 year, recognizing increasing challenges to the business posed by fibre availability and costs, the Company recorded an asset impairment of $95.0 million. Before taking account of adjusting items, the Company's operating income was $31.9 million for the current year, with adjusted net income of $0.38 per share, an improvement of $96.5 million from the adjusted operating loss of $64.6 million for the prior year, and adjusted net loss of $0.34 per share. The Company reported an operating loss for 2021 of $65.5 million, versus an operating loss of $56.1 million for 2020.

For the fourth quarter of 2021, the Company reported an operating loss of $137.2 million. After taking account of adjusting items, largely comprised of an asset impairment, the Company's operating loss for the fourth quarter of 2021 was $41.1 million compared to an adjusted operating income of $19.3 million for the previous quarter. The loss in the current period reflected weaker global pulp market conditions, combined with the significant impact of severe weather conditions on the Company's operations and shipments in the current quarter, most notably at its Northwood Northern Bleached Softwood Kraft ("NBSK") pulp mill ("Northwood") and its Taylor Bleached Chemi-Thermo Mechanical Pulp ("BCTMP") mill ("Taylor"), as well as capital-related downtime at Northwood relating to the Company's decision to rebuild the lower furnace of recovery boiler number one ("RB1").   

Commenting on the Company's 2021 and fourth quarter of 2021 results, CPPI's Chief Executive Officer, Don Kayne said, "This was a difficult quarter to end what was an improved year for Canfor Pulp. Our pulp business faced many uncontrollable challenges in the second half of the year, including intense weather conditions in BC and global supply chain disruptions. We once again want to thank our employees for their hard work, resilience, and commitment to safety. The decision to rebuild the lower furnace of Northwood's RB1 came earlier than anticipated, but this capital rebuild will support the Company's efforts to achieve more operational stability. Despite these various challenges and upsets, we continued to preserve our strong cash position and ended the year with a solid balance sheet. With the completion of the RB1 rebuild anticipated by the end of March, we are very focused on optimizing our production performance, reducing costs, and maximizing fibre utilization in the coming months."

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Source: Canfor Pulp

 

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