Canfor Pulp Products Inc.reported an operating loss for 2023 of $127.5 million, compared to an operating loss of $106.0 million in 2022. After taking account of adjusting items, including an asset write-down and impairment charge in 2022, the Company’s adjusted operating loss was $129.9 million for the current year compared to an adjusted operating loss of $58.6 million for the prior year.
For the Q4 2023, the Company reported an operating loss of $15.1 million, compared to an operating loss of $49.3 million for the Q3 2023. After taking account of a net $10.9 million reversal of a previously recognized inventory write-down, the Company’s adjusted operating loss was $26.0 million for the Q4 2023, a $25.3 million improvement compared to an adjusted operating loss of $51.3 million for the previous quarter. These results largely reflected a moderate improvement in global pulp market conditions, combined with a 20% increase in pulp production quarter-over-quarter.
Commenting on the Company’s 2023 and Q4 2023 results, Canfor Pulp Products’ President and CEO, Kevin Edgson, said, “Despite a challenging year, our employees remained focused as we navigated through the wind down of the Prince George pulp mill and successful transition of slush pulp supply from the Intercontinental pulp mill to our paper machine. We are pleased to see productivity improve this quarter following the maintenance downtime at the Northwood pulp mill. While market conditions showed some signs of recovery in the Q4, demand uncertainty is anticipated, and we remain cautious in our market outlook. In addition, as the availability of economically viable fibre remains constrained, Management continues to focus on improving overall performance and preserving our balance sheet.”
Outlook
Looking forward, global softwood kraft pulp markets are projected to be fairly subdued through the Q1 2024. While global pulp producer inventories are estimated to remain within the balanced range, demand uncertainty is anticipated, driven principally by the deceleration in China NBSK pulp list prices in December and leading up to the seasonally slower spring period in China.
The Company has no major maintenance outages planned for the Q1 2024. In the Q2 2024, a maintenance outage is scheduled at Intercon, with a projected 5,000 tonnes of reduced NBSK market pulp production.
Given the ongoing uncertainty with regards to the availability of economically viable fibre in BC and a projected weak North American lumber market, the Company anticipates a challenging fibre supply environment for its pulp mills (both for sawmill residual chips and whole-log chips), especially in the near-term. The Company will continue to monitor operating conditions and will adjust operating rates at its pulp mills to align with economically viable fibre supply.
Bleached kraft paper markets are projected to remain solid through the Q1 2024 as the uptick in global paper demand towards the end of 2023 is anticipated to continue. A maintenance outage is currently planned at the Company’s paper machine in the Q2 2024 with a projected 5,000 tonnes of reduced paper production.
Canfor Pulp Products Inc. is a leading global supplier of pulp and paper products with operations in the northern interior of British Columbia, Canada.
