Canfor Corp.'s reported Thursday a $66.7-milllion loss for the second quarter of 2023.
The outcome was in contrast to the $531.6-million profit recorded for the same quarter last year and marks the third successive quarter for which the lumber and pulp producer finished with a loss. Year-to-date, the company now sits $275.2 million in the red, well down from $1.27 billion in profit by the same point last year.
In a statement, CEO Don Kayne indicated it could have been worse if not for strong and improved quarter-over-quarter results for its European and Southern U.S. operations.
"This helped partially offset the results from our Western Canadian lumber business, especially our British Columbian operations, that continued to face challenges due to persistent weak Western Spruce/Pine/Fir market conditions," he said.
"Also, in this quarter, we completed the permanent closure of our Chetwynd facilities and the temporary closure of our Houston sawmill. Both wind downs were completed safely, and we thank our employees for the grace and resilience they have demonstrated during this difficult period.
"For the pulp business, this quarter was a difficult period, as declining global pulp market conditions weighed heavily on results."
The wildfire situation in B.C. and Alberta did not help as the record-setting amount of hectares burned disrupted the company's operations as well as access to fibre, harvesting and hauling activities.
In face of enduring high interest rates, the company says it is anticipated that new home builders will continue to offer concessions to make houses more affordable.
"As a result, residential construction activity is projected to experience a slight improvement through the third quarter of 2023 as the underlying demand for housing in North America remains. In the do-it-yourself space, demand is forecast to slow towards the end of the third quarter, largely attributable to seasonal factors."
Canfor Pulp posted a $37.9 million loss, compared to $25.2 million loss for the first quarter and included a $6.9 million write-down related to the permanent closure of the pulp line at Prince George Pulp and Paper.
Looking ahead, the demand for softwood kraft is expected to remain challenging due to record-high inventory coming with weak demand, particularly for paper and writing grades.
Hit with a one-week closure due to the the labour dispute at the Ports of Vancouver and Prince Rupert, the Northwood Northern Bleached Softwood Kraft pulp mill is also due for a scheduled maintenance outage in September. As part of this outage, Canfor Pulp will complete an inspection of the mill, including the two recovery boilers, with the intention of formulating a re-investment plan for Northwood’s recovery boiler number one.
The closure in July reduced production by about 10,000 tonnes and the closure in September is expected to take 25,000 tonnes off the market.
On Wednesday, West Fraser reported a $131-million loss for the quarter.
