Canfor's Operating Loss Tapered to $50 Million in Q2

SEATTLE (Scrap Monster): Canfor Corporation today announced results for second quarter of 2019. The company reported operating loss of $49.7 million during the quarter. The operating loss, after adjusting for softwood lumber duties, restructuring costs and reversal of inventory provision, stood at $5 million. The operating loss in Q2 2019 is an improvement from the operating loss of $69.9 million for the initial quarter of the year.

Canfor’s total lumber production of 1.38 billion board feet was significantly higher by 11% when matched with the prior quarter. Lumber unit manufacturing and production costs were lower than the previous quarter. The higher Western SPF shipments resulted in 24% surge in total lumber shipments to 1.47 billion board feet. Meantime, pulp production was up by 9% to 300,000 tonnes. Also, the pulp manufacturing costs remained moderately lower when compared with the previous quarter.

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Don Kayne, Canfor’s President and Chief Executive Officer noted that the SYP business delivered solid results in Q2. However, the Western SPF business passed through another difficult quarter, mainly challenged by adverse market conditions and high log costs.

Canfor expects modest increase in pulp prices towards the end of the current year and into 2020. The demand in the U.S. housing sector is expected to remain steady in the second half of 2019. Global softwood pulp market challenges are likely to persist in Q3, mainly on account of oversupply condition and seasonally lower demand during summer. The global pulp inventory levels are expected to return to more balanced levels towards the end of 2019 and into 2020, the company press release said.