2023 was a challenging year for Canfor Corporation, as the weak global lumber market conditions experienced late in 2022 continued throughout the current year. Ongoing inflationary pressures and high interest rates gave rise to persistent affordability concerns for consumers, reducing global lumber demand and increasing lumber inventory levels in most global regions. Despite the economic uncertainty, demand in the repair and remodel segment remained strong through 2023, especially in North America, exceeding levels observed before the pandemic.
In response to these global market conditions as well as a constrained fibre supply environment, the Company reduced production at its Western Canadian operations by a total of 760 million board feet in 2023. In the US South, the Company successfully started-up its greenfield sawmill in DeRidder, Louisiana, early in 2023, and continues work on two major growth projects at Urbana, Arkansas and Axis, Alabama.
For 2023, Canfor reported an operating loss of $531.6 million, compared to operating income of $1,074.1 million in 2022. After taking account of adjusting items, including inventory valuation adjustments and an asset write-down and impairment charge in 2022, the Company’s adjusted operating loss was $588.8 million for the current year (adjusted shareholder net loss per share of $2.79), compared to adjusted operating earnings of $1,306.2 million for the prior year (adjusted shareholder net income per share of $7.15).
For the Q4 2023, the Company reported an operating loss of $191.3 million, compared to an operating loss of $65.1 million for the Q3 2023. After taking account of adjusting items, largely comprised of inventory valuation adjustments, the Company’s adjusted operating loss for the Q4 2023 was $232.4 million compared to an adjusted operating loss of $85.9 million for the previous quarter, as an improvement in pulp and paper segment earnings quarter-over-quarter was more than offset by a decline in lumber segment results.
Commenting on the Company’s 2023 and Q4 2023 results, Canfor’s President and CEO, Don Kayne, said, “It was an extremely challenging year for the Company as ongoing affordability constraints and high global lumber inventory levels put persistent pressure on lumber market conditions throughout the year, including in the Q4. While our global footprint helped mitigate some of these market-related headwinds, our British Columbia operations continued to face ongoing challenges associated with a lack of economically viable fibre in BC. For our pulp business, despite an improved fourth quarter, this was another tough year as relatively weak global pulp market fundamentals were combined with the ongoing cost and operational impacts driven by sustained fibre shortages in BC. We are continuing to adjust our BC operating rates to manage through this challenging period and while, in the nearterm, we anticipate these conditions to persist, we continue to believe that longer term lumber market fundamentals remain positive.”
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.
