The shareholder net income for the 1Q 2013 included various items affecting comparability with prior periods as well as certain required IFRS accounting adjustments related to the Company's 50% interest in Canfor-LP OSB Limited Partnership, which had an overall positive impact on the Company's results of $8.4 million, or $0.06 per share.
After adjusting for such items, the Company's adjusted shareholder net income for the 1Q 2013 was $70.3 million, up $50 million, or $0.35 per share, from an adjusted shareholder net income of $20.31 million, or $0.141 per share, for the 4Q 2012, and an adjusted shareholder net loss of $24.11 million, or $0.181 per share, for the 1Q 2012.
The Company reported operating income of $100 million (adjusted $111.02 million) for the 1Q 2013, more than double the $49.0(1) million recorded for the 4Q 2012. Improved results reflected a strengthening U.S. housing market and improved operating performances at the Company's lumber and pulp mills. Lumber sales realizations experienced strong gains during the quarter, with both Western Spruce/Pine/Fir ("SPF") and Southern Yellow Pine ("SYP") products appreciating to levels not seen in almost eight years. The previous quarter results included a one-time accounting gain related to the Company's salaried post retirement benefit plans.
Lumber production, at just under 1.2 billion board feet, was up 8%, or 92.5 million board feet, from the previous quarter, reflecting a full quarter of production from the Company's recently restarted Radium mill and overall improved productivity, as well as the impact of the Christmas period in the previous quarter. Lumber unit manufacturing costs were in line with the previous quarter, with a reduction in unit conversion costs reflecting higher production levels, offset by a modest increase in unit log costs largely resulting from higher market-related stumpage and increased hauling costs.
Commenting on the 1Q performance, Canfor's President and CEO, Don Kayne, said, "We are encouraged by the stronger lumber markets and steady improvement in the U.S. housing market. Global pulp markets improved slightly as we saw some modest upward movement in prices ahead of the seasonally stronger spring period."
Kayne added that the Company's lumber and NBSK pulp mills saw significant uplifts in productivity as the quarter progressed. "We are seeing positive results from the significant capital improvements we have made in the last few years," said Kayne.
Canfor is a leading integrated forest products company based in Vancouver, British Columbia (BC) with interests in BC, Alberta, Quebec, and North and South Carolina. The Company produces primarily softwood lumber and also produces oriented strand board, specialized wood products and bleached chemi-thermo mechanical pulp. Canfor also owns a 50.2% interest in Canfor Pulp Products Inc., which is one of the largest producers of northern softwood kraft pulp in Canada and a leading producer of high performance kraft paper.