Canfor credits strong offshore demand and an increase in construction for higher lumber sales.
Canfor Corporation reported net income attributable to shareholders of $22.2 million, or $0.16 per share, for the third quarter of 2012, compared to $4.5 million, or $0.03 per share, for the second quarter of 2012 and a shareholder net loss of $21.6 million, or $0.15 per share, for the third quarter of 2011.
For the nine months ended Sept. 30, 2012, the shareholder net income was $10.5 million, or $0.08 per share, compared to net loss of $12.5 million, or $0.09 per share, for the comparable period of 2011.
The company reported moderate market improvements in the third quarter of this year, crediting further “stabilization of underlying demand in both North American and offshore markets,”
the company’s release states.
U.S. housing activity continued the upward trend seen in the prior quarter, with housing starts for the quarter averaging 786,000 units SAAR (seasonally adjusted annual rate), up seven per cent from the previous quarter.
The company reported Canadian housing starts were down three per cent from the previous quarter, to 223,000 units SAAR and up eight per cent from the third quarter of 2011 when starts were 206,000 units SAAR.
While market conditions in China continue to show solid demand, Canfor reports Japan also remains stable through the quarter.
“Global softwood pulp markets weakened through the summer months, with price erosion occurring for most of the quarter,” the release added.
The average spruce, pine fir (SPF) two by four price rose by two per cent to US$300 per mfbm, with a slight increase for most wider SPF product.
Export tax on Canadian shipments to the U.S. dropped an average of five percent, from a 13 per cent average in the previous quarter to the current average of eight per cent.
Southern yellow pine (SYP) also saw an increase in two by four pricing, but dropped slightly for wider product.
Northern bleached softwood kraft (NBSK) pulp fell across the board with prices down US$47 to US$853 per tonne.
The strengthening Canadian loonie (average of 1. 5 per cent) negatively impacted all solid wood and pulp prices.
“The improvement in lumber sales realizations reflected a steady increase in construction activity in North America and continued solid offshore demand for Western SPF lumber products,” Canfor president and CEO, Don Kayne said, adding the company has now fully integrated its recently acquired operations in the south-east Kootney region.
“The start-up of our upgraded Radium
mill early in the fourth quarter of 2012 will further boost our capacity to provide high quality products to our valued customers.”
Regarding pulp and paper results this quarter, Kayne replied:
“It was a tough quarter as our pulp business faced challenges presented by weaker markets and the Canfor Pulp facilities came out of an extended period of major maintenance and capital upgrades.
“The focus now is on getting these recently upgraded pulp mills achieving targeted operating rates.”