Vancouver, B.C.-  Conifex Timber Inc. is reporting a net loss of $2.4 million dollars for the second quarter of 2010. That means the company has registered a net loss of $4 million dollars for the first six months of the year.

 

This compares to a net loss of $1.7 million for the second quarter of 2009 and a net loss of $7.1 million for the six months ended June 30, 2009.

 

The losses are being blamed on increased costs brought on by a low operating rate and the temporary curtailment of the Fort St. James planer mill to allow for a $30 million dollar capital upgrade at that facility.  That temporary curtailment happened when lumber prices reached their highest mark since 2006.When complete, the company expects the modernization to bring about cost effective operations on a two shift basis. The upgrades should be complete by the end of this year.

 

Conifex also purchased the former Abitibi Bowater mill in Mackenzie which it has yet to start up. The paper mill part of that facility is being held for sale.

 

Lumber production for the second quarter of 2010 was 41.3 million board feet, an increase of 15% over the second quarter of 2009. Revenues for the second quarter of 2010 totalled $12.6 million compared to $8.4 million for the second quarter of 2009. The increase in revenues is attributable to a 9% increase in shipment volume and a 33% increase in unit sale prices over the same period last year.

 

The company says it experienced some cost relief through  the reduced export tax rate, which averaged 8.33% during this quarter compared to 15% in prior periods. The export tax is charged on softwood lumber shipments from Canada to the United States.

 

Conifex shipped approximately 40% of its total volume to the U.S. during the second quarter of 2010 compared to 50% during the same period last year. The balance of the lumber was shipped to customers in Canada, China and Japan.