Canfor Pulp Products Inc. (“The Company” or “CPPI”) (TSX: CFX) today reported its second quarter of 2023 results:
- Q2 2023 reported operating loss of $38 million; net loss of $28 million, or $0.44 per share
- Significant deterioration in global pulp market fundamentals throughout the quarter driven by record high pulp producer inventory levels and weak global pulp demand
- Completed closure of pulp line at Prince George Pulp and Paper mill
- Subsequent to quarter-end, a labour dispute at British Columbian ports resulted in transportation bottlenecks and a short curtailment at the Company’s Northwood NBSK pulp mill
The Company reported an operating loss of $37.9 million for the second quarter of 2023, compared to an operating loss of $25.2 million for the first quarter of 2023. After taking into consideration a net $6.9 million inventory writedown in the current period, the Company’s adjusted operating loss was $31.0 million for the second quarter of 2023, compared to an adjusted operating loss of $21.6 million for the first quarter of 2023. These results, for the most part, reflect the impact of substantial global pulp pricing declines in the current quarter driven by elevated global market pulp producer inventory levels and weak global softwood pulp demand. In January 2023, the Company announced the decision to restructure its operating footprint to align its manufacturing capacity with the long-term supply of economic residual fibre and, as a result, in April 2023, the Company wound down and permanently closed the pulp line at its Prince George (“PG”) Northern Bleached Softwood Kraft (“NBSK”) Pulp and Paper mill. 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. The combined impact of these operating structure changes is a reduction of approximately 280,000 tonnes of market kraft pulp production annually.
Commenting on the Company’s second quarter of 2023 results, CPPI’s President and Chief Executive Officer, Kevin Edgson, said, “Following our difficult decision to permanently close the pulp line at the Prince George Pulp and Paper mill, we had a smooth and efficient wind down of the pulp line and an effective transition of slush pulp supply to our paper machine. We want to thank our employees for their unwavering commitment to safety along with their determination, dedication, and resilience to continue to strive for improved operating performance and reliability. Financially, this was a challenging quarter for the pulp business as declining global pulp market conditions weighed heavily on results. While we continue to navigate the current external challenges facing our pulp business, including the ongoing weak global pulp market fundamentals, we greatly appreciate our employees’ continued efforts in navigating through these difficult conditions.”
Source: Canfor Pulp
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