Canfor Posts $211m Loss Amid Global Squeeze for Pulp Fibre | Wood Central

Canfor, one of the world’s largest forest companies, has reported a CA $209 million loss for the third quarter, including an asset write-down and impairment charge of CA $211 million within its pulp division.

The loss, announced yesterday, comes as Canfor, like other pulp producers in central and northern British Columbia, has experienced a significant reduction in the supply of sawmill residual chips, which the temporary and permanent sawmill curtailments and closures in the region have driven.

“The company continues to face persistent challenges accessing economic fibre, the results of which led to another curtailment of our operations this quarter,” said outgoing Canfor pulp president Kevin Edgson in the results report.

“These decisions weigh heavily on our results, as well as our employees, their families and the local communities. Despite these challenges, our business realized improved adjusted operating earnings this quarter, and we executed a safe, smooth and efficient wind-down of one line at Northwood.”

In response to constraints, Canfor has taken several steps to address the slide, including securing additional fibre supply, prioritising discretionary capital spending to maximise fibre utilisation and recovery, and making decisions concerning the company’s operating footprint.

These include closing the pulp line at its Prince George pulp and paper mill in early 2023 and, more recently, the August winddown of one production line at the Northwood Northern Bleached Softwood Kraft (NBSK) mill. These curtailments reduce the company’s annual market kraft pulp production by approximately 580,000 tonnes.

During the third quarter of 2024, fibre challenges were further exacerbated by additional sawmill closure announcements in the BC Interior, which were in response to weak lumber market conditions, upcoming increases in US tariffs on lumber exports and various regulatory complexities.

As a result, the reduction in fibre supply and the ongoing uncertainty surrounding economic fibre availability continue to impact the company. Subsequently, an asset write-down and impairment charge of $211.0 million was recognised in the third quarter of 2024 as a reduction to the carrying value of the company’s pulp segment assets.

After adjusting for the asset write-down and impairment charge, the company’s operating income for the third quarter of 2024 was $1.7 million, a $7.3 million improvement compared to the second quarter of 2024.

Despite some moderation in US-dollar pulp list prices to China during the current quarter, the company’s results primarily reflected modestly higher NBSK pulp unit sales realisations, offset in part by reduced pulp production and shipment volumes in the period following the successful winddown of one production line at Northwood in August 2024.

Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.

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