Canfor Pulp reports results for the second quarter of 2024
Overview.
- Q2 2024 operating loss of
$5.6 million ; net loss of$6.3 million , or$0.10 per share. - Strong global pulp pricing and moderate improvement in NBSK pulp unit sales realizations.
- Intercon NBSK pulp mill scheduled maintenance downtime completed as planned; restart delayed due to unforeseen recovery boiler repairs and start up challenges.
- Announced indefinite curtailment of one production line at Northwood NBSK pulp mill, driven by the decline in availability of economic fibre in the northern
British Columbia region.
Financial results.
The following table summarizes selected financial information for CPPI for the comparative periods:
(millions of Canadian dollars, except per share amounts) |
|
Q2 2024 |
|
Q1 2024 |
|
YTD 2024 |
|
Q2 2023 |
|
YTD 2023 |
|||
Sales |
$ |
220.0 |
$ |
222.3 |
$ |
442.3 |
$ |
249.5 |
$ |
492.8 |
|||
Reported operating income (loss) before amortization |
$ |
11.0 |
$ |
1.2 |
$ |
12.2 |
$ |
(15.3) |
$ |
(15.9) |
|||
Reported operating loss |
$ |
(5.6) |
$ |
(15.7) |
$ |
(21.3) |
$ |
(37.9) |
$ |
(63.1) |
|||
Adjusted operating income (loss) before amortization1 |
$ |
11.0 |
$ |
1.2 |
$ |
12.2 |
$ |
(8.4) |
$ |
(5.4) |
|||
Adjusted operating loss1 |
$ |
(5.6) |
$ |
(15.7) |
$ |
(21.3) |
$ |
(31.0) |
$ |
(52.6) |
|||
Net loss |
$ |
(6.3) |
$ |
(2.4) |
$ |
(8.7) |
$ |
(28.4) |
$ |
(47.2) |
|||
Net loss per share, basic and diluted |
$ |
(0.10) |
$ |
(0.04) |
$ |
(0.13) |
$ |
(0.44) |
$ |
(0.72) |
1. Adjusted results referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the "Non-IFRS financial measures" section of this document. |
The Company reported an operating loss of
In
Commenting on the Company's second quarter of 2024 results, CPPI's President and Chief Executive Officer,
Second quarter highlights.
Although global pulp producer inventories remained relatively balanced throughout the current quarter, the uplift in global softwood kraft pulp markets experienced at the end of the first quarter continued well into the second quarter, as global supply disruptions gave rise to an uptick in global pulp pricing. As a result, NBSK pulp list prices on orders from
Pulp production was 130,000 tonnes for the second quarter of 2024, down 28,000 tonnes, or 18%, from the first quarter of 2024, primarily due to a reduction in operating days at Intercon. While the scheduled maintenance at Intercon was successfully completed as planned in early May, downtime was extended into early June to address unplanned repairs that were determined necessary following an inspection of Intercon's recovery boiler. The delayed restart resulted in pulp from Northwood being redirected to supply the Company's specialty paper facility.
Notwithstanding higher slush pulp costs (linked to the uplift in Canadian dollar NBSK pulp unit sales realizations), operating income in the Company's paper segment was
Outlook.
Looking forward, global softwood kraft pulp market conditions are anticipated to soften through the third quarter of 2024 as global softwood pulp supply stabilizes, following disruptions in the first and second quarters of 2024, and as new hardwood capacity in
As a result of the aforementioned decision to wind down one production line at its Northwood pulp mill in
Bleached kraft paper demand is forecast to remain solid through most of the third quarter of 2024, after which a modest slowdown in demand is anticipated as global kraft paper inventories return to more normalized levels.
No major maintenance outages are planned for the third quarter of 2024.
Additional information and conference call.
A conference call to discuss the second quarter's financial and operating results will be held on
The conference call will be webcast live and will be available at www.
Non-IFRS financial measures.
Throughout this press release, reference is made to certain non-IFRS financial measures which are used to evaluate the Company's performance but are not generally accepted under IFRS and may not be directly comparable with similarly titled measures used by other companies. The following table provides a reconciliation of these non-IFRS financial measures to figures reported in the Company's condensed consolidated interim financial statements:
(millions of Canadian dollars, except per share amounts) |
|
Q2 2024 |
|
Q1 2024 |
|
YTD 2024 |
|
Q2 2023 |
|
YTD 2023 |
||
Reported operating loss |
$ |
(5.6) |
$ |
(15.7) |
$ |
(21.3) |
$ |
(37.9) |
$ |
(63.1) |
||
Inventory write-down |
$ |
- |
$ |
- |
$ |
- |
$ |
6.9 |
$ |
10.5 |
||
Adjusted operating loss |
$ |
(5.6) |
$ |
(15.7) |
$ |
(21.3) |
$ |
(31.0) |
$ |
(52.6) |
||
Amortization |
$ |
16.6 |
$ |
16.9 |
$ |
33.5 |
$ |
22.6 |
$ |
47.2 |
||
Adjusted operating income (loss) before amortization |
$ |
11.0 |
$ |
1.2 |
$ |
12.2 |
$ |
(8.4) |
$ |
(5.4) |
Forward-looking statements.
Certain statements in this press release constitute "forward-looking statements" which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Words such as "expects", "anticipates", "projects", "intends", "plans", "will", "believes", "seeks", "estimates", "should", "may", "could", and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on Management's current expectations and beliefs and actual events or results may differ materially. There are many factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements. Forward-looking statements are based on current expectations and Canfor assumes no obligation to update such information to reflect later events or developments, except as required by law.
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