Canfor Corp. generated "strong financial results" in 2018 as it earned $608.6 million in operating income - the highest the the sawmill and pulp mill operator has seen in over 10 years - the company said in a year-end report, issued last week.
"Reported annual results include record-high pulp and paper segment earnings and solid lumber segment operating income," the company said.
"The latter was achieved despite major challenges presented by significant log supply constraints and log cost increases in British Columbia, severe transportation issues in the first half of the year, extreme weather across North America and one of the worst forest fire seasons in B.C., as well as significant market volatility during the year."
However, it reported an operating loss of $79.1 million for the fourth quarter of 2018, "with the decline in earnings reflecting lower operating income for both the lumber and pulp and paper segments."
The results include expense of $39.9-million expense that went to the ongoing duties charged for lumber imports into the United States.
There was also a $36.7-million inventory valuation adjustment, representing the excess of the carrying cost of year-end lumber and log inventory over net realizable value.
Adjusted for those items, the Company's operating loss was $2.5 million for the fourth quarter, well down from the $246.9 million of operating income Canfor took in over the third quarter.
The company has imposed a series of production curtailments on sawmills in over the final quarter of 2018 and the first quarter of 2019 in answer to declining lumber prices.
Pulp production also took a hit when one of the recovery boilers at the Northwood plant had to be repaired and the Enbridge natural gas pipeline exploded at a spot just outside the city created disruptions to the fuel supply.
Looking ahead, the U.S. housing market is forecast to show a modest recovery through 2019, while the repair and remodeling sector south of the border is projected to record solid growth. Notwithstanding high inventory levels, global softwood kraft pulp markets are projected to be steady through the first half of 2019, reflecting an anticipated pick-up in demand from China and reduced supply during the traditional spring maintenance period.
The full reports are posted with this story at www.princegeorgecitizen.com.
