In This Article:
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Operating Loss (Lumber Business): $336 million, including a $100 million asset write-down and $121 million noncash duty-related adjustments.
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Adjusted Operating Loss (Lumber Business): $129 million, compared to $115 million in the prior quarter.
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Operating Loss (Pulp Business): $209 million, including a $211 million asset write-down.
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Adjusted Operating Income (Pulp Business): $2 million, an improvement of $7 million from the previous quarter.
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Net Debt (Canfor Pulp): $68 million.
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Available Liquidity (Canfor Pulp): $85 million, excluding a term loan commitment of $80 million.
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Net Cash (Canfor, excluding Canfor Pulp): Approximately $330 million.
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Capital Expenditures (Consolidated): Approximately $117 million in the quarter, including $18 million for Canfor Pulp.
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Anticipated Capital Spend (Lumber Segment 2024): Approximately $450 million.
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Anticipated Capital Spend (Pulp Segment 2024): Approximately $50 million.
Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Canfor Corp (CFPZF) is expanding its operations in Alberta, the US South, and Europe, which supports its globally diversified operating platform.
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The Kootenay operations in British Columbia continue to perform well, focusing on high-margin specialty products.
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The new sawmill in Axis, Alabama, has begun production, with an expected annual capacity of 250 million board feet.
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The Urbana upgrade project is nearing completion, which will increase capacity to 285 million board feet.
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Despite challenges, Canfor Pulp's financial results improved in the third quarter, supported by higher sales realizations.
Negative Points
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Canfor Corp (CFPZF) announced the closure of its Plateau and Fort St. John operations in Northern BC, removing about 1 billion board feet of annual production capacity.
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The lumber business in North America recorded significant losses in the third quarter due to weak lumber prices and increasing duties.
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The company faced an asset write-down and impairment charge of $100 million, along with noncash duty-related adjustments of $121 million.
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European operations are challenged by increasing log costs, although they generated positive operating income.
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The pulp business recorded an operating loss of $209 million, including a $211 million asset write-down and impairment charge.
Q & A Highlights
Q: We've seen a slowdown in European lumber imports. Can you comment on Canfor's volume from the region and the impact of North American imports versus domestic demand in Europe? A: Kevin Pankratz, Senior Vice President of Sales and Marketing, explained that European imports are down due to slumping North American pricing, making it less competitive. However, Canfor's volume from Vida into North America remained stable, largely due to committed program business, including home center business.