Prince George, B.C.- Canfor’s results for the second quarter of 2009 show a net income of $10.5 million. That compares to a net loss of $58.8 million for the first quarter of 2009 and net income of $64.2 million  for the second quarter of 2008.

 

For the six months ended June 30, 2009, Canfor’s net loss was $48.3 million more than double its net loss of $21.2 million for the same period in 2008.

 

The current 2^nd quarter results shouldn’t lead anyone to think things are turning around in the industry. The company says the full effect of the recession and the low level of housing starts in the U.S. were masked by several one time items.

 

Significant one-time items in the quarter with an overall positive impact on net income of $27.5 million included

-the increased value of the Canadian dollar (a gain of $4.9 Million )

- A foreign exchange translation gain on Canfor’s US dollar denominated debt, net of investments, of $19.7 million  as a result of the stronger Canadian dollar. Year-to-date, the gain is $ 10.6 million

- Restructuring, mill closure and severance costs of $7.5 million resulting principally from the indefinite closures of three sawmill operations in the second quarter.

 

After taking account of all one-time items affecting comparability, the Company's adjusted net loss for the second quarter of 2009 was $17.0 million, compared to a similarly adjusted net loss of $78.2 million for the first quarter of 2009.

For the first half of 2009, the adjusted net loss was $95.2 million, compared to a similarly adjusted net loss of $62.5 million for the first half of 2008.

 

Commenting on the results, Canfor's President and CEO Jim Shepard said, "Our second quarter's results are significantly impacted by one-time items and accounting adjustments, but the year-to-date results clearly highlight the challenges presented by this recession."

 

Canfor indefinitely idled its Radium, Rustad and Vavenby sawmills in June and July, further reducing its lumber operating rate to approximately 50% of capacity. Canfor is also curtailing another 95 million board feet, in the form of summer shuts, at its continuing Western SPF and SYP operations in the third quarter. "We are facing a market downturn that is unprecedented in terms of both duration and intensity, and we have to continue to adjust our production to reflect significantly lower levels of demand," said Shepard.

 

With little improvement in market demand projected for the balance of 2009 and first part of 2010, Shepard says Canfor’s top priorities for the foreseeable future would remain cash conservation and sustainable operating performance improvements "We are determined to weather this storm and position the Company to take full advantage of the recovery when it comes. I continue to be encouraged by the progress we are making to that end."