Canfor Reports Results for First Quarter of 2023

Overview
• Q1 2023 adjusted operating loss of $146 million; adjusted shareholder net loss of $145 million, or $1.20 per share
• Strong earnings from the Company’s European operations and more modest earnings from its US South operations outweighed by continued pricing pressure on its Western Canadian operations
• Increased lumber production & shipments notwithstanding North American market-related challenges; uplift in pulp production despite ongoing fibre constraints

The Company reported an operating loss of $208.5 million for the first quarter of 2023, compared to an operating loss of $308.0 million in the fourth quarter of 2022. After adjusting for certain one-time items, including a $62.1 million inventory write-down in the current period, the Company’s operating loss was $146.4 million for the first quarter of 2023, a $17.4 million improvement compared to an adjusted operating loss of $163.8 million for the fourth quarter of 2022. These results reflected improved pulp and paper segment results, offset in part by a decline in lumber segment earnings.

Commenting on the Company’s first quarter results, Canfor’s President and Chief Executive Officer, Don Kayne, said, “This was another challenging quarter for our lumber business. Strong earnings from our European operations and more modest earnings from our US South operations were overshadowed by ongoing weakness in Western Spruce/Pine/Fir lumber pricing, which resulted in further temporary capacity reductions across our Western Canadian sawmills. In addition, we announced and began implementing a restructuring of our British Columbian lumber operations to better align manufacturing capacity with the available long-term fibre supply. Despite improved earnings, this was also a difficult quarter for our pulp business, driven by the wind down of the pulp line at the Prince George Pulp and Paper mill. While these restructuring decisions for both our lumber and pulp business will create a more sustainable operating footprint for Canfor going forward, we sincerely regret the impact on our employees, their families, contractors and our local communities.”
details at: https://www.canfor.com/docs/default-source/2023-news/2023_q1_cfp_press_release_tsx.pdf?sfvrsn=c41be191_2

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