Sky-High Lumber Prices Boost Canfor’s Q2 2018 Earnings

SEATTLE (Scrap Monster): Canfor Corporation announced robust results for second quarter of 2018. The company reported record adjusted operating income of $334 million, mainly driven by high lumber prices. The company had recorded robust results in first quarter 2018 as well.

The company reported continued growth in lumber and pulp business segments. The solid operational performance during the quarter helped the company to capitalize on favorable market conditions, so as to deliver record high operating earnings.

Canfor’s operating income surged higher from $203.8 million in Q1 this year to $282.1 million during the second quarter, backed by notable contribution from lumber, paper and pulp segments. The quarterly result also included $51.7 million and $35.6 million, which the company had expensed out in Q1 2017 and Q2 2017 respectively, towards countervailing and anti-dumping duty charges.

ALSO READ: Canfor Southern Pine Invests $40 Million to Upgrade Camden Sawmill

According to the company, the North American lumber demand continued to remain solid across all segments during the second quarter. The U.S. housing starts were up by 8% from the previous year. The Canadian housing construction activity too remained strong. The offshore lumber demand from China, Japan and other regions remained stable through the quarter. Canfor reported total lumber production of 1.31 billion board feet, whereas the total lumber shipments totaled 1.35 billion board feet.

The robust market demand resulted in 6% jump in Canfor's pulp shipments during the quarter. The scheduled maintenance outages at various mills contributed to 5% decline in total pulp production.

Commenting on the prospects for the remainder of 2018, Canfor noted that North American lumber prices are expected to remain solid. The domestic as well as offshore lumber demand, especially from Japan, is anticipated to remain strong. The U.S housing market is forecast to witness gradual recovery during the rest of 2018.