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Canfor: Lumber business plummets into negative zone

08.03.2019 − 

For the fourth quarter Canadian Canfor records an operating loss of -Can$87.7m for the lumber business division. By comparison with the preceding year operating profit therefore decreased by Can$242.6m. For the pulp and paper division a 77% decline in operating profit to Can$15.6m is recorded. Taking into account non-consolidated and other results, operating consolidated loss in the reporting period amounted to -Can$79.1m, net loss was recorded at -Can$46.0m.

In addition to the decline in softwood lumber prices on the US market, further determining factors for the decrease were the higher roundwood procurement costs especially in British Colombia as well as the downtime and production cutbacks in a number of sawmills in the province, according to Canfor. Even when adjusted to account for the payment of punitive tariffs on softwood lumber exports to the USA of Can$39.9m as well as value adjustments to stocks of +Can$36.7m, a loss of -Can$2.5m remains.

Softwood lumber production in the fourth quarter, at a total of 1.13bn bdft, was down almost 12% on the comparative quarter of the preceding year. This volume consisted of 793m bdft SPF lumber as well as 334m bdft southern yellow pine lumber. The volume of lumber sold declined by 10.5% to 1.11bn bdft, of which 783m bdft was SPF lumber and 331m bdft SYP lumber. The average price for SYP only fell by a marginal 0.4% compared to the previous year to US$457/1,000 bdft. The price for SPF, in contrast, declined by 29% to US$327/1,000 bdft. Turnover in the lumber division declined by some 14% to Can$738.4m as a consequence of the lower sales volume as well as lower prices.

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