Canfor Pulp Records Loss of $21.6 Million in 1st Quarter

Tuesday, April 28, 2009 10:28 AM

Prince George, B.C.- Canfor Pulp Limited Partnership has recorded a net loss of $21.6 million dollars in the first quarter of 2009.

The global economic environment is being blamed for much of the loss, as thee was a reduction n global demand for pulp and paper products, higher supply than demand, furthert reductions in NBSK pulp list prices.

The partnership had started a market curtailment in December 2008 that continued into the first quarter of 2009. The market curtailment at all of the manufacturing operations reduced market pulp production by approximately 14,000 tonnes and paper production by approximately 4,700 tonnes in the first quarter of 2009. Continued reductions in demand, particularly in the US printing and writing paper grades, resulted in a 15% decrease in the US dollar list price of NBSK pulp in the first quarter of 2009.

The Northwood Pulp Mill completed a maintenance outage in the first quarter of 2009, which reduced production by about 7,000 tonnes.

The Intercontinental and Prince George Pulp and Paper Mills are planning scheduled maintenance outages in the second quarter of 2009 and estimate reduced market pulp production of 7,000 tonnes and reduced paper production of 3,000 tonnes. There are no planned maintenance outages in the third quarter. For the remainder of the year there is a planned maintenance outage in the fourth quarter at the Northwood facility which is expected to reduce production levels by 21,000 tonnes.

Previous Story - Next Story

Email |

Print |

Facebook |

Twitter |

Digg |

Del.icio.us

Posted on Tuesday, April 28, 2009 10:28 AM in News by 250 News

Return to Home

Comments

Posted by: Loki on April 28 2009 2:30 PM

I really hate this turn of phrase.
They did not "lose" $21.6 million. They just did not earn their projected income due to less product being sold.

Posted by: justhefacts on April 28 2009 8:32 PM

I buy a house for 100,000. This house is purchased to convert into a business.
My business is selling newspapers.
Now I need to pay the bank at least $4000/yr, purchase supplies costing $2000/yr and pay labour expenses of $40,000. Total yearly expense $46,000.

If I projected a revenue income of $50,000 but actual revenue from selling the newspapers was $20,000, am I just fooling with the numbers or did I just "lose" $26,000 ??

What if I projected an income of $26,000...did I break even because of my exceptional ability to predict cash flow or did I still lose $26,000 ??

Loki,
Income minus expense = profit or loss

Posted by: Born in BC on April 28 2009 9:51 PM

Loki
You have no idea what you are talking about. Thats not the first time that Ive heard your little theory, but I assure you that you have no clue. Try reading a set of financial statements. There are only 3 or 4 important pages. Maybe you should try it. There is no 'projected income comparisson'. It is accounting income/loss. Before you say there is a projected income built into the accounting income, the answer again is no. Im giving you the benefit of the doubt and assuming that you understand more than justthefacts gives you credit for. Me apologies if this assumption is wrong.

Posted by: ssihota on April 29 2009 7:31 AM

I agree with Born in BC in that Loki has no idea what they're talking about. Pulp prices fell of severely in November due to rapidly weakening demand primarily in Asian markets where Canfor Pulp markets most of it's pulp. In some cases the price of particular pulp products fell as much as 30 - 40 percent, and this severely eroded margins reducing overall profitability. On top of that, with the fall in prices, there was a build up in inventory which resulted in further write downs to the net realizable value of the inventory - causing a further expense resulting in even poorer profitability. Look at every pulp company's results this quarter and you will see that all of them did quite poorly as a result of the lack of demand for paper and packaging products due to non existent global demand. Loki, also look at the Chicago Mercantile exchange's section on Pulp futures contracts and look at the historical data. You will see large variations in selling volumes and prices over the past year.