Conifex Timber reports 1Q net loss of $6.5 million

May 23, 2012. /Lesprom Network/. Conifex Timber Inc. reported a net loss of $6.5 million or $0.38 per share for the 1Q 2012 compared to a net loss of $7.5 million or $0.49 per share for the 4Q 2011, and a net loss of $3.6 million or $0.24 per share for the 1Q 2011. EBITDA in the 1Q 2012 was negative $3.8 million compared to negative $5.2 million in the previous quarter and negative $1.3 million in the 1Q 2011. The changes in EBITDA are generally attributable to the lumber segment as corporate costs and costs related to the bioenergy segment were similar in each comparative period. Lumber segment EBITDA was negative $2.7 million for the 1Q 2012 compared to negative $4.1 million for the previous quarter and negative $0.3 million for the 1Q 2011. Current quarter lumber segment results include those of newly acquired marketing and transportation and logistics subsidiaries. These businesses made a modest positive contribution to lumber segment EBITDA during the quarter that was in line with management expectations. The improvement of $1.4 million lumber segment EBITDA over the previous quarter was generally attributable to an increase in unit mill net realization, increased profit from lumber derivatives and lower unit cash conversion and marketing and administrative costs due partly to a higher operating rate. Lumber segment revenue totalled $47.4 million during the 1Q 2012, an increase of 22% over the previous quarter and 124% over the 1Q 2011. Shipment of Conifex produced lumber totalled 115 million board feet, a 7% decline from the previous quarter. The Company continued to ship heavily to export markets, particularly China, during the 1Q 2012 with approximately 62% of total shipment volumes going to these markets compared to 53% in the previous quarter and 44% in the 1Q 2011. Operating rates were 60% for the 1Q 2012, during which the Company produced 111 million board feet of lumber, compared to 51% for the previous quarter and 34% for the 1Q 2011. Production efficiencies during the current quarter were challenged by the recent conversion of the Fort St. James mill from a three-line to two-line configuration and weather related disruptions in January. The completion of the installation of an automated grading system at the Mackenzie Site II planer mill in April 2012 is expected to result in improved grade outturns, productivity gains from increased throughput and lower labour costs. The Company also expects an increase in production and shipments of premium grade products to Japan during subsequent quarters. Conifex and its subsidiaries' primary business currently includes timber harvesting, reforestation, forest management, and the manufacture, sale and distribution of its products. Conifex's lumber products are sold in the United States, Chinese, Canadian and Japanese markets. Upon the expected completion of its bioenergy facility at Mackenzie, British Columbia, Conifex's business sectors will be expanded to include bioenergy.