Canfor Loses $58.8 Million in 1st Quarter

By 250 News

Prince George, BC.-  Canfor Corporation has reported a net loss of $58.8 million  for the first quarter of 2009, despite  curtailments  that had the  company operating at 60% of its capacity.

The net loss for the first quarter of 2009 included one-time items which had an overall positive impact on net income of $19.4 million ($0.14 per share), including a gain of $37.8 million from the sale of property in New Westminster, (the site of the Company’s former Panel & Fibre operation).

The severe U.S. and global economic downturn continued to affect the Company’s financial results. U.S. housing starts, which were already at historically low levels, dropped a further 20% in the first quarter to the lowest level since records began in 1959. With orders in short supply, lumber prices receded further in the quarter, with Western SPF prices falling as low as US$134 per thousand board feet in January before recovering slightly towards the end of the quarter. Pulp markets were similarly impacted by very weak demand, and prices were under severe pressurethrough the quarter.

Compared to the same quarter of 2008, lumber unit production costs were down 7% despite an additional 250 million board feet of curtailment.

Commenting on the first quarter’s results, Jim Shepard, Canfor’s President and CEO, said: “Despite our success in driving controllable costs down in the last year, the effects of the unprecedented challenges presented by the current economic downturn are very evident in our results.”

In early March, the Company repaid $100 million of long-term debt, and ended the quarter with cash of $155 million, and $446 million of unused and available operating lines of credit. Subsequent to the end of the quarter, on April 1, 2009, the Company repaid a further $76 million of long-term debt.

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