For the 1Q 2022, Canfor Corporation reported operating income of $741.9 million compared to an operating loss of $66.8 million in the 4Q 2021. After taking account of adjusting items, largely comprised of asset impairments in the previous quarter, the Company’s adjusted operating income for the current quarter of $740.8 million was $524.5 million higher than adjusted operating income of $216.3 million reported for the 4Q 2021, primarily reflecting a significant increase in lumber segment earnings, and to a much lesser extent, improved pulp and paper segment results. 1Q 2022 sales increased to $ 2,213.3 million, compared to 1,941.8 million in the 1Q 2021.
Canfor’s President and CEO, Don Kayne, said, “We are very pleased to see the sustained strength in global lumber markets continuing into 2022 and while our pulp business continued to face challenges, we also saw improved results in the quarter. A solid operating performance across all of our lumber operating regions allowed us to capitalize on these favourable market fundamentals and execute on our diversification strategy with the recent acquisition of Millar Western. Despite these factors, the global supply chain crisis continues to negatively impact our operations and has resulted in curtailed and reduced lumber and pulp operating schedules. We will continue to assess the effects of this crisis and will make adjustments to our operating schedules as conditions evolve. We greatly appreciate our employees’ ongoing resilience in managing through the supply chain challenges.”
In the lumber segment, adjusted earnings increased $509.7 million quarter-over-quarter principally reflecting an extensive uplift in Western Spruce/Pine/Fir (“SPF”) and Southern Yellow Pine (“SYP”) US-dollar benchmark pricing in the current period, with the average North American Random Lengths Western SPF 2x4 #2&Btr price up US$563 per Mfbm, or 79%, and the average SYP East 2x6 #2 up US$564 per Mfbm, or 105%. The near record-high benchmark lumber pricing in the current quarter was combined with higher production and shipment volumes for the Company’s North American lumber operations, albeit moderated in part by the ongoing global supply chain challenges, especially in Western Canada. Current quarter results also reflected strong earnings for the Company’s European operations principally attributable to moderately higher European lumber unit sales realizations and, to a lesser extent, lower unit manufacturing costs, offset in part by a 5% stronger Canadian dollar (versus the Swedish Krona).
Canfor is a leading integrated forest products company based in Vancouver, BC with interests in BC, Alberta, North and South Carolina, Alabama, Georgia, Mississippi and Arkansas, as well as in Sweden with its majority acquisition of the Vida Group.
