Oct 30, 2009. /Lesprom Network/. Canfor has released its 3Q results with a net loss of $5.2 million. The company blames the ongoing slump in the U.S. housing market but says there were positives such as further cost reductions, higher pulp sales revenues and a foreign exchange translation gain on US dollar debt which limited the company's net loss, as Opinion250 reported.
These results compared to net income of $10.5 million for the 2Q 2009, and a net loss of $94.2 million for the 3Q 2008.
For the nine months ended September 30, 2009, the company's net loss was $53.5 million compared to a net loss of $115.4 million for the same period in 2008.
U.S. housing starts showed a marginal improvement through the 3Q, but remain at very depressed levels.
Commenting on the results, Canfor's President and CEO Jim Shepard said, "Our 3Q results reflect further progress in our cost reduction efforts and a welcome uplift in pulp prices, but there is no disguising the continued challenges presented by the troubled U.S. housing market."
Canfor operated at approximately 50% of lumber capacity for the quarter. In addition to indefinitely idling its Radium, Rustad and Vavenby sawmills in June and July, Canfor curtailed another 95 million board feet of lumber production, in the form of summer vacation shuts, at its continuing Western SPF and SYP operations in the 3Q.
In late July, the company restarted its Mackenzie sawmill after a 13-month curtailment. "The restarting of our Mackenzie operation is a good news story in very trying times and has been made possible through the cooperation of our employees and other stakeholders," said Shepard.
Lumber market conditions are expected to remain difficult through the balance of 2009 and into 2010, with the recent surge in the Canadian dollar creating additional challenges for Canadian producers. "We will continue to adjust our production levels to match demand," said Shepard. He added that Canfor’s top priorities in the short term would remain cash conservation and sustainable performance improvements. "Our overriding objective is the same - to emerge from this downturn stronger than ever so that we can take full advantage of the recovery when it comes," said Shepard.
In addition, Canfor has announced it will be taking curtailments at most of its sawmills over the Christmas period. This decision will reduce Canfor's lumber production by approximately 37 million board feet of SPF lumber.