Canfor Corp. (TSX: CFP) is reporting a third quarter loss of $65 million, with losses from its pulp operations accounting for a good chunk of the poor financials.
“For the third quarter of 2023, the company reported a consolidated operating loss of $65.1 million, which included a $49.3 million operating loss from Canfor Pulp Products Inc. (CPPI),” Canfor reports in its third quarter financials. “This compares to a consolidated operating loss of $66.7 million in the second quarter of 2023, $37.9 million of which was attributed to CPPI.”
In 2022, resource companies, including forestry companies, were so flush with cash they were handing out dividends, doing share buybacks and being targeted by the Trudeau government with windfall penalties.
While lumber prices in 2023 are a lot lower than in 2022 (when they were hitting record or near record prices), it’s not lumber prices so much that has dragged Canfor’s third quarter earnings into the so much as global pulp prices.
Year-to-date, Canfor reported revenues of $4.1 billion compared to $6 billion for the same period of 2022.
“Although global lumber markets remained under pressure in the quarter, our U.S. South operations continued to deliver strong earnings,” Canfor CEO Don Kayne said in a press release. “When combined with solid earnings from Europe and slightly better results from our Western Canadian operations, this outcome underscores the importance of our global diversification strategy.
“For our pulp business, this was a difficult quarter as global pulp market conditions continued to be challenged with the oversupply of product and tepid demand, and our operations faced significant planned and unplanned downtime that continued into the fourth quarter.”
