Canfor records loss for second quarter

Photo: Canfor Corp.

Canfor Corp. reported Friday a $49.7-million operating loss for its second quarter.

The outcome was a $20.2-million improvement over its first quarter result and once duties, restructuring costs and reversal of inventory provision, the second-quarter loss was reduced to $5 million.

In a news release, the company attributed the improvement "higher lumber segment earnings" that included a full quarter of the Vida Group of Sweden's results following completion of the acquisition in the first quarter of 2019.

But it left Canfor president and CEO Don Kayne with little to cheer about.

"This was another difficult quarter for our Western SPF business with the ongoing challenging market conditions, combined with high log costs, which have resulted in the announcement to close of our Vavenby mill and curtail other B.C. operations. We deeply regret the impact these decisions are having on our employees and local communities," he said.

"Our SYP business delivered solid results in the second quarter and we expect that to continue through the balance of the year. Our European business continued to deliver strong financial results.

"Our pulp business also delivered solid results in the second quarter but in the latter part of the quarter, we began to see significant erosion of NBSK pulp and BCTMP prices, which in combination with the reduced fibre supply in B.C. due to the industry-wide sawmill curtailments, resulted in the decision to curtail operations in the third quarter.

"We expect to see a modest increase in pulp prices towards the end of 2019 and into 2020 as the global inventory levels come back into balance."

Year-to-date, Canfor's net income loss stood at $138.1 million compared to a net income gain of $282 million by the same point last year.

The full reports for both Canfor Corp. and Canfor Pulp Products Inc. are posted with this story.

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