Canfor announces closure, third quarter results
November 13, 2007 By Pulp & Paper Canada
Vancouver, BC — Canfor announced on November 9 that it is permanently closing its Panel & Fibre mill in New Westmi…
Vancouver, BC — Canfor announced on November 9 that it is permanently closing its Panel & Fibre mill in New Westminster, BC, effective January 8th, 2008, once fibre inventories have been utilized and mill equipment decommissioned. The mill employs 126 people and manufactures specialty products including hardboard panels, erosion control wood mulch and baled fibre.
In addition, the company announced its third quarter results on November 1, with a net loss of $42.1 million per share for the quarter of $.30 per share on a diluted basis.
“Market conditions continued to negatively impact the industry and our company during the third quarter with SPF lumber prices averaging US $260. and the Canadian dollar appreciating to levels above parity with the US dollar, resulting in record low Canadian realized prices,” said Canfor’s president and CEO Jim Shepard in a news release accompanying the results. “During the quarter I was pleased with the reduced level of operating costs achieved, but it is troubling to note that since the end of the quarter the Canadian dollar has continued to strengthen and lumber prices have declined. As a result, we will be further curtailing our operation during the fourth quarter.”
Total curtailments taken will amount to approximately 255 million board feet of lumber production, and 10 million feet of panel production, primarily during the fourth quarter.
In a conference call to discuss the results with financial analysts and journalists, Shepard said that market conditions will dictate plans for the future. “If this market ratchets down, we will ratchet down our production,” he stated. Noting that the higher Canadian dollar and higher fibre costs more than offset positive factors in the quarter, such as improved efficiency and higher prices for NBSK, he suggested that production curtailment in 2008 could in a similar magnitude to this quarters, with the same issues clouding the outlook for next year.
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