Canfor Pulp Records 4th Quarter Loss

Wednesday, February 18, 2009 03:59 AM

Prince George, B.C. – Canfor Pulp Income fund has announced a net loss of $26 million in the fourth quarter. The loss includes $18.1 million in foreign exchange loss.

Capital expenditures, net of amounts funded from insurance proceeds, were $6.8 million in the quarter and $25.3 million for the year. Sales and earnings in the fourth quarter of 2008 were significantly impacted by the global financial crisis resulting in reduced demand for pulp and paper products, increased inventory levels and pressure on NBSK pulp list prices, causing a market curtailment at the end of the fourth quarter to control rising inventory levels.

The nine day market curtailment at all of the manufacturing operations reduced market pulp production by approximately 26,000 tonnes and reduced paper production by approximately 3,400 tonnes. Reduced demand, particularly in the US printing and writing paper grades, also resulted in reduced pulp and paper selling prices, and although the US dollar list price reductions were offset by the relative strength of the US dollar, an increased proportion of the Partnership's sales in the quarter were to lower margin Asian and spot markets.

The Intercontinental Pulp Mill and Prince George Pulp and Paper Mill completed their scheduled maintenance outages in the fourth quarter of 2008, which resulted in approximately 16,000 tonnes of reduced production. The Intercontinental Pulp Mill completed a capital project to increase the capacity of its pulp machine during the outage and the Prince George Pulp and Paper Mill completed construction of the permanent chip screening system, replacing the temporary system in place as a result of the fire in the first quarter of 2008.

There were no scheduled maintenance outages in the third quarter of 2008.

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Posted on Wednesday, February 18, 2009 03:59 AM in News by 250 News

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Comments

Posted by: PGDriver on February 18 2009 6:52 AM

Well shut it down at least the air will be better than.

Posted by: YamaDooPolCat on February 18 2009 7:06 AM

Ya, clean and quiet, like a coffin.

Posted by: Shellshadow on February 18 2009 8:21 AM

Sigh! And the crap continues and meanwhile more gouging to come from the utilities. On the news last night they said BC Hydro has applied for an immediate increase of 13% and they also want another 13%come fall. Natural Gas wants 11%, city council wants 3.4%, groceries increased dramatically when the gas prices where sky high and never reduced, gas prices are going back up & oh yes...we must not forget our new carbon tax ready to kick in. Have I missed anything? Will it ever end? Any breaks we got from both levels of government is eaten up by the greed. If the governments really wanted to help the tax payers they would put a stop to ANY INCREASES from anything necessary to live. IMO

Posted by: Loki on February 18 2009 8:22 AM

Let me understand: you want to shut down the largest single employer in the city, during a time of economic uncertainty? Because they are having financial troubles?
Maybe they just need a bailout.

Posted by: Loki on February 18 2009 8:26 AM

So the word from our political leaders is that we need to stimulate the economy by encouraging consumer spending. Yet from the other side of their collective mouth, they are calling for tax and fee increases. If our discretionary funds are continually whittled away in such a manner, we will not be able to "stimulate" the economy at all.

Posted by: dan on February 18 2009 9:08 AM

Does this mean that they actually lost 26 million dollars, or does it mean that they only made 74 million where they made 100 million previously?

I have noticed previously that when a mill doesnt make as much as it did the year / quarter before that they call it a loss.

Is this what they mean above, when they refer to a net loss of 26 million dollars?

Posted by: rufus1 on February 18 2009 9:17 AM

All I know is that they also cut the distribution and the price of the units have dropped another 50cents today. It is a killer.

Posted by: rufus1 on February 18 2009 9:33 AM

And I might add that if the general world economic situation does not improve very soon we are going to be in a very desperate condition up here before not too long. All that sugary talk about mining, inland port, airport,Prince Rupert port, Cariboo Connector etc is all just plain bs.Look around, read about the massive layoffs everywhere in the US and the rest of the world and today news new housebuilding rate in the US below 500,000 per year.
None of this turns around in one year -- more likely not in 5 yrs. Better hunker down --- new subdivision bfore council the other day is a giggle. Also glad I am not the developer of the new subdivision you see off Sparwood Rd.(across the Chief Lake Rd from Foothills) ---- that will be a financial noose for those guys.

Posted by: socredible on February 18 2009 8:24 PM

No, dan, a loss of 26 million means that their "liabilities" have increased relative to their "assets" by that amount, while the unit-holders "equity" (net worth) has decreased by that same amount. The Company is worth 26 million dollars less than it was a year ago, in other words.

"Profit" and "loss" in double-entry accrual accounting used by every company is not the same as profit and loss in simple, single-entry "cash" accounting. In double-entry, "profit" is the operational increase of Assets over Liabilities as per the basic Balance Sheet accounting equation Assets = Liabilities + Capital + (Sales - Expense). "Capital" is the unit-holders investment in the company, their 'ownership' value of its assets after its liabilites have been repaid to whoever they are owed.

Posted by: socredible on February 18 2009 8:40 PM

Shellshadow, it'll "end" when the system finally collapses completely beyond repair. Until then, everybody who can gouge a bit more out of us is going to try to square their own accounts by doing just that.

Just wait until all the much talked about 'stimulus' money starts to get spread around. Prices will really take off then!

Too bad "our" governments don't realize they could get far better results by applying the same amount of new 'money' they're planning to spend into circulation on 'stimulus' projects, to "compensate" retail prices of everything to all Consumers instead.

By doing that all retail prices could be lowered to Consumers, while business profits could be maintained, or even lowered as a percentage on increased turnover. The 'stimulus' would then come from a genuine increased Consumer demand, not an 'artificial' increase in the quantity of 'money', which will only induce inflation and higher Consumer goods prices.