Canfor Reports Results for First Quarter of 2018

Highlights
* Q1, 2018 adjusted operating income of $238.7 million driven by historically high lumber prices and record-high pulp and paper earnings; record-high sales of $1.23 billion
* Adjusted net income of $145.4 million, or $1.13 per share
* Net debt of $96.8 million, or 4.3% net debt to total capitalization, at March 31, 2018

The Company reported operating income of $203.8 million for the first quarter of 2018, down $10.4 million from reported operating income of $214.2 million for the fourth quarter of 2017, as lower operating earnings for the lumber segment were offset in part by record-high operating earnings for the pulp and paper segment. Reported results in the first quarter of 2018 include a net duty expense of $34.9 million, at a combined effective countervailing duty (“CVD”) and anti-dumping duty (“ADD”) rate of 14.34%. This compares to a net duty recovery of $23.4 million in the fourth quarter of 2017 reflecting the year-to-date true-up of preliminary CVD and ADD rates to current rates following final determinations announced by the US Department of Commerce (“DOC”) and US International Trade Commission (“ITC”). After adjusting for the duties, operating income was $238.7 million for the first quarter of 2018, up $47.9 million from similarly adjusted operating income in the fourth quarter of 2017.

Adjusted lumber segment earnings largely reflected higher Western Spruce/Pine/Fir (“Western SPF”) and Southern Yellow Pine (“SYP”) benchmark lumber prices, more than offsetting the impact of adverse winter weather conditions which resulted in significant transportation delays and contributed to increased unit log costs and lower production volumes through the quarter. Unit log costs in Western Canada also increased reflecting higher market-based stumpage and continued upward pressure on purchased wood costs. Record pulp and paper segment earnings largely reflected continued strong demand that resulted in significantly higher Northern Bleached Softwood Kraft (“NBSK”) pulp unit sales realizations.

North American lumber demand remained solid in the first quarter of 2018. US housing starts averaged 1,314,000 units on a seasonally adjusted basis, up 5% from the previous quarter and up 6% from the first quarter of 2017. Canadian housing construction activity in the first quarter of 2018 was in line with the previous quarter, at an average of 227,000 units on a seasonally adjusted basis. Offshore lumber demand from China, Japan and other regions remained solid through the first quarter, particularly for the Company’s higher-value lumber products.

Global softwood pulp markets remained favourable through the first quarter of 2018, resulting in US-dollar NBSK pulp list prices holding at near-record high prices, and a significant increase in average NBSK pulp unit sales realizations. Average Bleached Chemi-Thermo Mechanical Pulp (“BCTMP”) unit sales realizations showed a more moderate increase in the quarter, with increased demand towards the end of 2017 translating into higher average prices for product shipped in the current quarter.

Pulp shipments were up 3% from the previous quarter, as a 14,000 tonne vessel slippage from December into January more than offset transportation constraints in the current quarter. Pulp production was broadly in line with the fourth quarter of 2017, as strong productivity in March combined with increased operating days following the unscheduled outage at CPPI’s Northwood pulp mill in the previous quarter largely offset the impacts of various weather-related disruptions in January and February. Pulp unit manufacturing costs were moderately higher than the previous quarter, largely reflecting market-driven increases in fibre costs and weather-related increases in energy costs.

Commenting on the Company’s first quarter results, Canfor’s President and Chief Executive Officer, Don Kayne, said, “Despite the unprecedented challenges caused by severe weather and railcar availability, both our lumber and pulp businesses recorded solid financial results for the first quarter of 2018. This reflected strong market demand and the commitment of our sales, transportation and operations teams to ensure we minimized any disruption to our customers.”
more detail at:  http://www.canfor.com/docs/default-source/news-2018/2018_q1_cfp_press-release_final.pdf?sfvrsn=7292ed91_2

Related Posts

Sappi Gratkorn’s next step to increase the share of renewable energy

As part of Sappi Europe's full scale decarbonisation roadmap, Gratkorn mill is expanding the share of biomass to be used as an energy source, further driving the move away from fossil fuels as part of the mill’s contribution to the European roadmap. The project follows the recent modernisation of the power plant boiler which enabled the shift from coal to a combined approach of biomass and natural gas. The mill is now embarking on a next step, enhancing its infrastructure and therefore capacity in order to handle the delivery, sorting and processing of increased biomass levels. This increased utilisation requires an improved biomass handling system at the mill as well as decentralised intermediate storage terminals within the surrounding regions.

Stora Enso invests in automated CLT coating line for shortened construction times

Stora Enso invests EUR 9 million in an automated CLT (cross-laminated timber) coating line at the Ybbs sawmill in Austria. The investment will further strengthen Stora Enso’s position as a leading global provider of engineered wood products for low carbon, sustainable buildings. In the construction industry, there is labor shortage and a pressure to shorten the construction time on-site. The investment enables industrially pre-applied CLT coatings on the CLT walls and floors produced at Stora Enso’s Ybbs site. The automated coating solution results in shorter construction times and higher wood protection. “With this new automation line, we can apply high-quality water-based coating to approximately 500,000m² of CLT walls and floors per year – making us the world leader in this segment. Our customers will benefit from improved protection of CLT against moisture, sunlight, insects and fire, as well as nicely coloured visual surfaces,” says Lars Völkel, EVP Wood Products division.

New Generation of Matte-Coated Inkjet Papers from Mitsubishi HiTec Paper (whattheythink.com)

For many years, Mitsubishi HiTec Paper's matt inkjet papers have established themselves as the standard in the market. Now the Bielefeld-based speciality paper manufacturer has revised the entire matt portfolio of its jetscript® inkjet media. The new generation of matt inkjet papers with basis weights from 70 to 228 g/m² impresses with a whole range of product improvements. The optimised coated ink-receiving layer enables particularly vivid, lifelike and brilliant colours. The homogeneous, even surface of the new papers is particularly noticeable with large-area prints. The higher optical ink density optimises the reproduction of dark and black shades in particular. The application areas of the new inkjet papers range from large-format and poster prints in retail and at the POS, direct mailings, publishing and brochures to photos and photo books.
Back To Top
×Close search
Search