VANCOUVER, BC, March 5, 2024 - Canfor Pulp Products Inc. ("The Company" or "CPPI" or "Canfor Pulp") (TSX: CFX) today reported its 2023 and fourth quarter of 2023 results:
Overview
- 2023 operating loss of $128 million; net loss of $96 million, or $1.47 per share
- Q4 2023 operating loss of $15 million; net loss of $13 million, or $0.20 per share
- Moderate uplift in global pulp market fundamentals through the fourth quarter driven by a slight increase in demand and purchasing activity in most major regions
- 20% increase in pulp production in the fourth quarter reflecting improved operating performance at both the Northwood and Intercontinental NBSK pulp mills
- Persistent challenges associated with the availability of economic fibre in British Columbia
2023 was a difficult year for Canfor Pulp, as a deterioration in global pulp market fundamentals was combined with ongoing cost and operational challenges driven by sustained fibre shortages in British Columbia ("BC").
With continuing fibre cost pressures and a declining outlook for economic residual fibre in BC, in January 2023, Canfor Pulp made the decision to restructure its operations. As a result, in April 2023, the Company wound down and permanently closed the pulp line at its Prince George Northern Bleached Softwood Kraft ("NBSK") pulp and paper mill ("PG"). In connection with this closure, the Company's Intercontinental NBSK pulp mill ("Intercon") was successfully converted to provide slush pulp to its specialty paper facility, formerly supplied by PG. The combined impact of these operating structure changes is a reduction of approximately 280,000 tonnes of market kraft pulp production annually.
Canfor Pulp reported an operating loss for 2023 of $127.5 million, compared to an operating loss of $106.0 million in 2022. After taking account of adjusting items, including an asset write-down and impairment charge in 2022, the Company's adjusted operating loss was $129.9 million for the current year compared to an adjusted operating loss of $58.6 million for the prior year.
For the fourth quarter of 2023, the Company reported an operating loss of $15.1 million, compared to an operating loss of $49.3 million for the third quarter of 2023. After taking account of a net $10.9 million reversal of a previously recognized inventory write-down, the Company's adjusted operating loss was $26.0 million for the fourth quarter of 2023, a $25.3 million improvement compared to an adjusted operating loss of $51.3 million for the previous quarter. These results largely reflected a moderate improvement in global pulp market conditions, combined with a 20% increase in pulp production quarter-over-quarter.
Commenting on the Company's 2023 and fourth quarter of 2023 results, CPPI's President and Chief Executive Officer, Kevin Edgson, said, "Despite a challenging year, our employees remained focused as we navigated through the wind down of the Prince George pulp mill and successful transition of slush pulp supply from the Intercontinental pulp mill to our paper machine. We are pleased to see productivity improve this quarter following the maintenance downtime at the Northwood pulp mill. While market conditions showed some signs of recovery in the fourth quarter, demand uncertainty is anticipated, and we remain cautious in our market outlook. In addition, as the availability of economically viable fibre remains constrained, Management continues to focus on improving overall performance and preserving our balance sheet."
Source: Canfor Pulp
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