Canfor Corporation reported an operating loss of $250.8 million for the Q2 2024, compared to an operating loss of $85.8 million in the Q1 2024. After accounting for adjusting items totaling $83.0 million (consisting of an inventory write-down as well as an asset write-down and impairment charge), the Company's operating loss was $167.8 million for the current quarter. In addition, when taking into consideration $38.5 million in restructuring costs recognized this period, correlated with the permanent and indefinite curtailments in the lumber and pulp businesses, the Company's operating loss for the Q2 2024 was $129.3 million, compared to a similarly adjusted operating loss of $116.0 million in the prior quarter. These results were primarily driven by a decline in lumber segment results, offset to a degree by improved pulp and paper segment earnings.
For the lumber segment, the operating loss was $230.5 million for the Q2 2024, compared to the previous quarter's operating loss of $57.1 million. In the current quarter, these results include adjusting items consisting of a $51.4 million inventory write-down and an asset write-down and impairment charge of $31.6 million. These results also include $32.6 million in restructuring costs associated with changes in the Company's operating footprint, noted below, in both British Columbia ("BC") and the US South.
For the pulp and paper segment, the operating loss was $5.6 million for the Q2 2024, compared to an operating loss of $15.7 million for the Q1 2024. These results largely reflected an uplift in global pulp pricing, primarily in response to global pulp supply disruptions, and the correlated improvement in CPPI's average Northern Bleached Softwood Kraft ("NBSK") pulp sales unit realizations. These factors were oGset in part, however, by a decline in CPPI's pulp production and shipments quarter-over-quarter, driven by extended downtime at its Intercontinental NBSK pulp mill ("Intercon") to address unforeseen recovery boiler repairs identified during the scheduled maintenance in May.
Commenting on the Company's Q2 results, Canfor's President and CEO, Don Kayne, said, "This quarter posed considerable challenges for our lumber business. While our European operations delivered solid earnings, North America continued to face a persistently weak pricing environment.
During the quarter, we made some difficult decisions, including the permanent closure of our Polar sawmill and the suspension of plans to invest in Houston. Operating conditions in BC remain extremely challenging as we continue to face significant constraints accessing economically viable fibre. With the high-cost operating environment in BC, depressed North American lumber markets and expected increases in duty deposits next month, we will continue to evaluate and adjust our BC operating rates to mitigate ongoing losses."
"For our pulp business" added Kayne, "despite strong global pulp pricing and improved NBSK pulp unit sales realizations experienced during the current quarter, fibre supply constraints in BC led to the announcement of an indefinite curtailment of one production line at our Northwood NBSK pulp mill."
Canfor is a global leader in the manufacturing of high-value low-carbon forest products including dimension and specialty lumber, engineered wood products, pulp and paper, wood pellets and green energy.
Print
