VANCOUVER, BC, July 23, 2020 - Canfor Pulp Products Inc. ("The Company" or "CPPI") (TSX: CFX) today reported second quarter 2020 results:
- Second quarter of 2020 reported operating loss of $6 million, includes $8 million inventory write-down
- Net loss of $1 million, or $0.02 per share
The following table summarizes selected financial information for CPPI for the comparative periods:
The Company reported an operating loss of $6.3 million for the second quarter of 2020, down $12.4 million from operating income of $6.1 million reported for the first quarter of 2020. Reported results for the second quarter of 2020 included an $8.2 million finished pulp and raw material inventory write-down at period end. After adjusting for this, the Company's operating income was $1.9 million for the second quarter of 2020, up $6.5 million from a similarly adjusted operating result in the previous quarter.
The Company's operating results for the second quarter of 2020 reflected direct and indirect impacts of the coronavirus outbreak ("COVID-19") on global markets, and more specifically the pulp and paper business. Global pulp prices improved during April, resulting largely from increased demand for at-home tissue coupled with supply disruptions, principally in Latin America and Australasia; however, prices came increasingly under pressure in the back half of the current quarter reflecting a sharp decline in printing and writing demand combined with more moderated tissue purchasing activity. For the second quarter as a whole, Canadian-dollar pulp unit sales realizations showed a modest increase compared to the previous quarter, boosted by slightly higher Northern Bleached Softwood Kraft ("NBSK") prices to North America, improved prices for Bleached Chemi-Thermo Mechanical Pulp ("BCTMP") and a weaker Canadian dollar. The effect of COVID-19 on lumber sawmill operating rates in the BC Interior, particularly in April and May, materially impacted residual fibre supply to the Company's Prince George ("PG") based operations, resulting in a three-week curtailment at the Company's Northwood NBSK pulp mill ("Northwood") in the current quarter, as well as increased fibre costs reflecting a higher proportion of more expensive whole log chips.
Source: Canfor Pulp