Canfor Reports Strong Results for First Quarter of 2018

SEATTLE (Scrap Monster):  Canfor Corporation has announced the results for first quarter of 2018. The record-high sales of $1.23 billion coupled with historically high lumber prices and record-high pulp and paper earnings helped the company post an adjusted operating income of $238.7 million during Q1 2018.

The operating income for the first quarter of the year has declined by $10.4 million from the prior quarter to total $203.8 million. The company had reported operating income of $214.2 million during the fourth quarter last year. The lower operating earnings from lumber segment were partially offset by record-high operating earnings from the pulp and paper segment. The adjusted operating income of $238.7 million during the quarter was up by $47.9 million from Q4 last year.

Adverse winter weather conditions resulted in considerable transportation delays. This resulted in increased unit log costs and lower production volumes throughout the quarter. Western SPF and Southern Yellow Pine benchmark lumber prices remained high.

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The North American lumber demand remained solid in the first quarter. The US housing starts were up by almost 6% from the comparable quarter in 2017. The Canadian housing sector activity too remained in line with the previous quarter. The demand for higher-value lumber products from offshore markets including China, Japan and other regions remained solid through the first quarter.

Canfor Corp. reported total lumber production of 1.24 billion board feet. The lumber shipments during the quarter totaled 1.20 billion board feet. The pulp production was in line with the previous quarter, whereas the pulp shipments edged higher by 3% over the quarter.

Commenting on the company’s performance, Don Kayne, President and CEO noted that both the lumber and pulp businesses reported strong quarter despite challenges caused by adverse weather and shortage of railcar availability. The company is committed to go ahead with the construction of the earlier announced greenfield sawmill, Kayne added.