Canfor Records Another Loss

Thursday, November 01, 2007 02:50 PM

Prince George, B.C. - Canfor has reported a net loss of $42.1 million for the third quarter of 2007. This compares to a net loss of $38.8 million in the second quarter , and $42.7 for the first quarter for a year to date net loss of $123.6 million dollars.

The loss is, for the most part, because of the status of the lumbermarkets with low demand, and a high Canadian dollar. Even improvements in mill operational performance could not overcome the effect of lower Canadian prices realized for lumber because of the stronger Canadian dollar.

Canfor also experienced a loss in the pulp and paper segement because even though the US price for pulp has climbed, it hasn’t gone up high enough to offset the surging Canadian dollar.

In response to the continued pressures of low lumber prices and the strong Canadian dollar, Canfor is announcing plans to take additional curtailments at its operations for two weeks to coincide with December holidays.

Together with previously announced lumber curtailments of 74 million board feet, the total curtailments will amount to approximately 255 million board feet of lumber production, and 10 million square feet of panels production, primarily during the fourth quarter.

“Market conditions continued to negatively impact the industry and our company during the third quarter with SPF lumber prices averaging US $260 and the Canadian dollar appreciating to levels above parity with the US dollar,resulting in record low Canadian realized prices,” said Canfor’s President and CEO, Jim Shepard. “During the quarter I was pleased with the reduced level of operating costs achieved, but it is troubling to note that since the end of the quarter the Canadian dollar has continued to strengthen and lumber prices have declined,” he said. “As a result, we will be further curtailing our operations during the fourth quarter,” Shepard stated.

“The appointment of Tom Sitar as Canfor’s Vice President, Finance and Chief Financial Officer completes the restructuring of our executive team as we position the company to weather this storm,” he concluded.

Previous Story - Next Story

Email |

Print |

Facebook |

Twitter |

Digg |

Del.icio.us

Posted on Thursday, November 01, 2007 02:50 PM in News by 250 News

Return to Home

Comments

Posted by: dazed_but_not_confused on November 1 2007 4:05 PM

It's a scary time to be in the lumber industry...or to be a community reliant on it. I wonder what will be left after all of the issues with bug kill and the housing market in the states is over with.

Posted by: Green1 on November 1 2007 8:34 PM

Funny they are making a big thing of the loss last week their income trust posted a big profit

The Partnership reported sales of $228.9 million and net income of $33.2 million, or $0.46 per unit, for the quarter
ended September 30, 2007. Due to the impact of a stronger Canadian dollar, these results are down from prior
quarter sales of $239.4 million and net income of $35.9 million, or $0.51 per unit. Total manufacturing costs improved
slightly when compared to the second quarter as higher mill productivity combined with lower energy, maintenance
and operating costs offset an increase in fibre costs. Fibre costs increased 4% as a result of higher whole log chip
deliveries. The Partnership increased the volume of whole log chipping in the quarter in order to increase chip
inventories to mitigate the potential impact of future sawmill curtailments. The third quarter 2007 results are lower
than those in the same period a year ago, when sales were $213.6 million with net income of $41.9 million ($0.59 per
unit), primarily due to the impact of the stronger Canadian dollar and fibre costs, which more than offset increases in
NBSK pulp list prices.