Canfor Pulp reports results for the fourth quarter of 2024
Overview.
- Q4 2024 operating income of
$4 million ; net income of$3 million , or$0.04 per share. - Market fundamentals remained relatively flat throughout most of the quarter, with some positive momentum late in the period as producers worked to reduce their higher-than-average inventory levels.
- 22% decrease in pulp production during Q4 2024 (versus Q3 2024) primarily due to the indefinite curtailment of one production line at its Northwood NBSK pulp mill in
August 2024 . - Persistent challenges associated with the availability of economic fibre in
British Columbia .
Financial results.
The following table summarizes selected financial information for CPPI for the comparative periods:
|
(millions of Canadian dollars, except per share amounts) |
Q4 2024 |
Q3 2024 |
YTD 2024 |
Q4 2023 |
YTD 2023 |
|
|||||||||
|
Sales |
$ |
163.1 |
$ |
193.2 |
$ |
798.6 |
$ |
193.9 |
$ |
875.5 |
|
||||
|
Reported operating income (loss) before amortization, asset write-down and impairment |
$ |
12.3 |
$ |
18.8 |
$ |
43.3 |
$ |
1.1 |
$ |
(42.5) |
|
||||
|
Reported operating income (loss) |
$ |
4.1 |
$ |
(209.3) |
$ |
(226.5) |
$ |
(15.1) |
$ |
(127.5) |
|
||||
|
Adjusted operating income (loss) before amortization, asset write-down and impairment1 |
$ |
12.3 |
$ |
18.8 |
$ |
43.3 |
$ |
(9.8) |
$ |
(44.9) |
|
||||
|
Adjusted operating income (loss)1 |
$ |
4.1 |
$ |
1.7 |
$ |
(15.5) |
$ |
(26.0) |
$ |
(129.9) |
|
||||
|
Net income (loss) |
$ |
2.9 |
$ |
(156.1) |
$ |
(161.9) |
$ |
(13.2) |
$ |
(96.1) |
|
||||
|
Net income (loss) per share, basic and diluted |
$ |
0.04 |
$ |
(2.39) |
$ |
(2.49) |
$ |
(0.20) |
$ |
(1.47) |
|
||||
|
Adjusted net income (loss)1 |
$ |
2.9 |
$ |
(2.1) |
$ |
(7.9) |
$ |
(13.2) |
$ |
(96.1) |
|
||||
|
Adjusted net income (loss) per share, basic and diluted1 |
$ |
0.04 |
$ |
(0.03) |
$ |
(0.13) |
$ |
(0.20) |
$ |
(1.47) |
|
||||
|
1. Adjusted results referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the "Non-IFRS financial measures" section of this document. |
Commenting on the Company's fourth quarter results, CPPI's President and Chief Executive Officer,
Fourth quarter highlights.
For the fourth quarter of 2024, the Company reported operating income of
As mentioned, in
Notwithstanding the decline in adjusted pulp segment results in the current period, the improvement in operating income for the Company as a whole, largely reflected a moderate uplift in paper unit sales realizations, particularly to North American markets, combined with an increase in paper production quarter-over-quarter.
Global softwood pulp market fundamentals remained relatively flat through the fourth quarter of 2024, following a moderate decline in the preceding quarter. However, later in the period, global demand and purchasing activity experienced some positive momentum as producers worked to reduce their higher-than-average inventory levels. Global softwood pulp producer inventories ended
Outlook.
Looking forward, global softwood pulp market conditions are projected to improve through the balance of the first quarter and into the second quarter of 2025, as global supply dynamics adjust to new hardwood capacity and as pulp producer inventories normalize. On the demand side, steady Chinese demand is anticipated to absorb these changes in supply.
The Company continues to monitor the trade situation between
The Company remains focused on optimizing its operating footprint, enhancing operational reliability as well as closely managing manufacturing and fibre costs. Looking forward, there remains significant uncertainty with regards to the availability of economically viable fibre within BC. As a result, the Company continues to anticipate that escalating log cost pressures and transportation costs in BC will translate into a higher cost fibre supply for its pulp mills (both for sawmill residual chips and whole log chips). The Company will continue to evaluate operating conditions and adjust operating rates at its pulp mills to align with economically viable fibre supply. These factors could also affect the Company's operating plan, liquidity, cash flows and the valuation of long-lived assets.
No major maintenance outages are planned for the first and second quarters of 2025. In the third quarter of 2025 a maintenance outage is scheduled at Northwood with a projected 10,000 tonnes of reduced NBSK market pulp production. In the fourth quarter of 2025, a maintenance outage is scheduled at the Company's Intercontinental NBSK pulp mill ("Intercon"), with a projected 5,000 tonnes of reduced NBSK market pulp production.
Demand for bleached kraft paper is projected to remain steady through the remainder of the first quarter of 2025. A maintenance outage is currently planned at the Company's paper machine in the fourth quarter of 2025 with a projected 5,000 tonnes of reduced paper production.
Refer to the Company's annual Management's Discussion and Analysis for further discussion on the Company's results for the fourth quarter of 2024 on page 14.
Additional information and conference call.
A conference call to discuss the fourth quarter's financial and operating results will be held on
The conference call will be webcast live and will be available at www.
Non-IFRS financial measures.
Throughout this press release, reference is made to certain non-IFRS financial measures which are used to evaluate the Company's performance but are not generally accepted under IFRS and may not be directly comparable with similarly titled measures used by other companies. The following table provides a reconciliation of these non-IFRS financial measures to figures reported in the Company's condensed consolidated interim financial statements:
|
(millions of Canadian dollars) |
Q4 2024 |
Q3 2024 |
YTD 2024 |
Q4 2023 |
YTD 2023 |
||||||||||||
|
Reported operating income (loss) |
$ |
4.1 |
$ |
(209.3) |
$ |
(226.5) |
$ |
(15.1) |
$ |
(127.5) |
|||||||
|
|
Asset write-down and impairment |
$ |
- |
$ |
211.0 |
$ |
211.0 |
$ |
- |
$ |
- |
||||||
|
|
Inventory write-down (recovery) |
$ |
- |
$ |
- |
$ |
- |
$ |
(10.9) |
$ |
(2.4) |
||||||
|
Adjusted operating income (loss) |
$ |
4.1 |
$ |
1.7 |
$ |
(15.5) |
$ |
(26.0) |
$ |
(129.9) |
|||||||
|
|
Amortization |
$ |
8.2 |
$ |
17.1 |
$ |
58.8 |
$ |
16.2 |
$ |
85.0 |
||||||
|
Adjusted operating income (loss) before amortization, asset write-down and impairment |
$ |
12.3 |
$ |
18.8 |
$ |
43.3 |
$ |
(9.8) |
$ |
(44.9) |
|||||||
|
(millions of Canadian dollars, net of tax) |
Q4 2024 |
Q3 2024 |
YTD 2024 |
Q4 2023 |
YTD 2023 |
||||||||||||
|
Net income (loss) |
$ |
2.9 |
$ |
(156.1) |
$ |
(161.9) |
$ |
(13.2) |
$ |
(96.1) |
|||||||
|
|
Asset write-down and impairment, net of tax |
$ |
- |
$ |
154.0 |
$ |
154.0 |
$ |
- |
$ |
- |
||||||
|
Adjusted net income (loss) |
$ |
2.9 |
$ |
(2.1) |
$ |
(7.9) |
$ |
(13.2) |
$ |
(96.1) |
|||||||
Forward-looking statements.
Certain statements in this press release constitute "forward-looking statements" which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Words such as "expects", "anticipates", "projects", "intends", "plans", "will", "believes", "seeks", "estimates", "should", "may", "could", and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on Management's current expectations and beliefs and actual events or results may differ materially. There are many factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements. Forward-looking statements are based on current expectations and Canfor assumes no obligation to update such information to reflect later events or developments, except as required by law.
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