Canfor Records $94.2 Million Dollar Loss
By 250 News
Thursday, October 30, 2008 07:21 PM
Prince George, B.C.- The global economic crisis has placed its mark on Canfor's third quarter results. The company reports a net loss of $94.2 million for the third quarter of 2008, compared to net income of $64.2 million for the second quarter of 2008 and a net loss of $42.1 million for the third quarter of 2007.
The loss means that as of the end of September, Canfor has lost $115.4 million this year, that is $8 million dollars better than the same period last year when Canfor recorded a net loss of $123.6 million.
There were some significant items in the quarter :
• An asset impairment charge of $56.9 million, related to the Company’s investments in Howe Sound Pulp and Paper Limited Partnership. The impairment reflects the continuing deterioration of B.C. Coastal pulp, paper and fibre market conditions.
• Losses recorded on derivative financial instruments of $21.4 million, reflecting a sharp decline in energy prices and a weaker Canadian dollar in the third quarter. Year-to-date, the loss related to these contracts was $4.2 million.
• A foreign exchange translation loss on the Company’s US-dollar denominated debt, net of investments, of $11.3 million, as a result of the weaker Canadian dollar.
Canfor’s President and CEO, Jim Shepard, expressed a positive attitude about the results “I continue to be very encouraged by the progress we are making on driving down our controllable costs, in the face of unprecedented
challenges facing the industry. The results reflect a strong effort by all our employees to the worst market conditions in living memory.”
The challenges continue with housing starts in the U.S. continuing to slide, prices for lumber and oriented strand board products lost the gains made over the summer and pulp markets weakened .
Shepard says the company expected conditions for all of its products to be extremely challenging through the balance of 2008 and in 2009 in view of the current financial and credit market turmoil and weak U.S. economic outlook. “A meaningful recovery of the U.S. housing market in 2009 appears unlikely,” said Shepard.
Shepard says Canfor's priorities will continue to be the management of its costs and its cash position, and the delivery of sustainable performance improvements. “We will remain totally focused on what we can control, to make sure we
are well positioned to take full advantage of the market recovery when it comes,” said Shepard.
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Posted by: Chester on October 30 2008 9:30 PM
Look at their management....look at heir business strategies.....
Amazing how their competitors turn in better results quarter after quarter after quarter.
I pulled my shares several years ago and thank god I did.