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Canfor posts record-high quarterly sales in second-quarter results

August 3, 2018 – Canfor Corporation has published its second-quarter results and reports not only record-high quarterly sales of $1.46 billion, but also a record adjusted operating income driven by historically high lumber prices and record-high pulp and paper earnings.

The adjusted operating income is $334 million, and the adjusted net income is $214 million, or $1.66 per share.

Global softwood pulp markets remained strong through the second quarter of 2018, with near-record high US-dollar Northern Bleached Softwood Kraft (NBSK) pulp list prices to China reflecting tighter supply during the traditional spring maintenance period as well as healthy global demand.

Average NBSK pulp unit sales realizations were moderately higher than the previous quarter reflecting the weaker Canadian dollar combined with rising US-dollar NBSK pulp list pricing in other regions, particularly North America. Average Bleached Chemi-Thermo Mechanical Pulp (BCTMP) unit sales realizations showed a moderate decrease quarter-over-quarter, with lower US-dollar pricing more than offsetting the weaker Canadian dollar.

Pulp shipments were up six per cent from the previous quarter, reflecting strong market demand and an unwinding of inventory resulting from the transportation challenges in the previous quarter. Pulp production was down five per cent from the previous quarter following scheduled maintenance outages at CPPI’s Prince George NBSK pulp mill, as well as at its Taylor BCTMP mill, which reduced NBSK pulp production by approximately 4,000 tonnes and BCTMP production by approximately 17,000 tonnes, offset in part by improved productivity at CPPI’s NBSK pulp mills.

Notwithstanding some seasonal weakness in China during the traditionally slower summer months, global softwood kraft pulp markets are projected to be balanced through the third quarter of 2018. For the months of July and August 2018, CPPI announced NBSK pulp list price increases in North America of US$40 per tonne and US$30 per tonne, respectively.

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