Conifex recorded $27.2 million in net income for 2021, according to year-end results issued earlier this month.
The outcome represents a significant swing from the $6.5-million loss registered over the course of 2020 as revenue from sales of lumber produced at the company's Mackenzie sawmill nearly doubled to $180.2 million from $98.4 million the year before.
As well, wholesale sales jumped to $36.9 million from $3.3 million the year before, while revenue from its bioenergy plant stood at $23.5 million, compared to $24.7 million.
The company did hit turbulence. By midway through the year it had achieved $30.6 million in net income only to follow up with losses totalling $3.4 million over the remainder.
"Lumber production in the second half of 2021 was impacted by extreme winter weather conditions throughout British Columbia, COVID-19 related shift scheduling issues, and a two-week temporary lumber production curtailment necessitated by the combined impact of record high delivered log costs and a collapse in lumber prices following the record high peak in pricing seen in the first half of the year," the company said in the report issued March 8.
After hitting record-high levels in the second quarter, lumber prices fell sharply in the third before recovering in the fourth. The price for benchmark Western spruce, pine and fir averaged $1,090 over 2021, a 46-per-cent increase from the year before.
"The continued strong demand for new home construction and repair and remodelling activities, combined with low inventory volumes," were credited for the difference.
Looking forward, the company is expecting the market to remain strong and, after running at 77 per cent capacity in 2021, are aiming for 90 per cent during this year. Lower operating costs are also anticipated "as a result of decreased unit fixed costs on higher lumber production volumes and availability of sufficient logs."
However, while repairs to several critical rail and truck routes have progressed, "our ability to ship products in a timely manner remains a challenge. While we are unable to estimate when full transportation services will resume, we continue to utilize alternative transportation routes and methods to the extent they are available to continue shipments to our customers."
The company will also defer any decision on upgrading or expanding its operation until it is "satisfied that the Ministry of Forests has developed a plan to restore competitiveness in the Mackenzie (Timber Supply Area) and has disclosed the outcome of its consultations with First Nations about old-growth ecosystem conservation, wildlife protection set asides, and other factors that may impact the economically available timber supply in the Mackenzie region."
The year for Conifex was in line with those of other lumber producers.
In February, West Fraser Timber Inc. reported earnings of $2.95 billion on sales of $10.5 billion for 2021, compared to $776 million million on $5.85 billion in sales during 2020.
In March, Canfor reported $1.5 million in adjusted net income on $7.7 billion in sales, up from $555.6 million on $5.4 billion in sales the year before.
