Canfor Pulp reports results for the third quarter of 2025
Overview.
- For the third quarter of 2025, the Company reported an operating loss of
$16 million , a net loss of$12 million , and a loss per share of$0.19 . - Global pulp market fundamentals remained at depressed levels throughout the third quarter; markets in
China were persistently weak, while North American markets softened, adjusting to the lower pricing environment in other regions. - Global pulp producer inventories remained well above the balanced range and continued to increase throughout the third quarter.
- Global demand for North American kraft paper experienced further declines in the third quarter driven by persistent economic uncertainty and heightened competition.
- Pulp production improved by 5% quarter-over-quarter.
Financial results.
The following table summarizes selected financial information for CPPI for the comparative periods:
|
(millions of Canadian dollars, except per share amounts) |
Q3 2025 |
Q2 2025 |
YTD 2025 |
|
Q3 2024 |
|
YTD 2024 |
|
||||
|
Sales |
$ |
164.6 |
$ |
177.9 |
$ |
538.7 |
$ |
193.2 |
$ |
635.5 |
|
|
|
Reported operating income (loss) before amortization, asset write-down and impairment |
$ |
(7.2) |
$ |
3.5 |
$ |
17.6 |
$ |
18.8 |
$ |
31.0 |
|
|
|
Reported operating loss |
$ |
(16.0) |
$ |
(5.3) |
$ |
(10.5) |
$ |
(209.3) |
$ |
(230.6) |
|
|
|
Adjusted operating income (loss) before amortization, asset write-down and impairment1 |
$ |
(2.3) |
$ |
6.4 |
$ |
25.4 |
$ |
18.8 |
$ |
31.0 |
|
|
|
Adjusted operating income (loss)1 |
$ |
(11.1) |
$ |
(2.4) |
$ |
(2.7) |
$ |
1.7 |
$ |
(19.6) |
|
|
|
Net loss |
$ |
(12.4) |
$ |
(6.7) |
$ |
(13.1) |
$ |
(156.1) |
$ |
(164.8) |
|
|
|
Net loss per share, basic and diluted |
$ |
(0.19) |
$ |
(0.10) |
$ |
(0.20) |
$ |
(2.39) |
$ |
(2.53) |
|
|
|
Adjusted net loss1 |
$ |
(12.4) |
$ |
(6.7) |
$ |
(13.1) |
$ |
(2.1) |
$ |
(10.8) |
|
|
|
Adjusted net loss per share, basic and diluted1 |
$ |
(0.19) |
$ |
(0.10) |
$ |
(0.20) |
$ |
(0.03) |
$ |
(0.17) |
|
|
|
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. |
|
|||||||||||
The Company reported an operating loss of
These results largely reflect the ongoing impact of global pulp pricing declines in the current quarter driven by elevated market pulp producer inventory levels and weak softwood pulp demand. These factors were moderated to a degree by improved pulp production at both of the Company's pulp mills and the associated benefit of lower per-unit pulp manufacturing costs.
Commenting on the Company's performance,
Third quarter highlights.
After experiencing downward pressure in the second quarter of 2025, global softwood pulp markets remained notably weak during the current period. Northern Bleached Softwood Kraft ("NBSK") pulp prices in
Global softwood pulp producer inventories continued to increase through the third quarter of 2025, ending August at 52 days of supply, an increase of 2 days compared to
The Company's average NBSK pulp unit sales realizations experienced a significant decrease compared to the previous quarter, primarily reflecting the continued declines in global US-dollar NBSK pulp list prices.
Pulp production was 107,000 tonnes in the third quarter of 2025, an increase of 5,000 tonnes, or 5%, compared to the second quarter of 2025, primarily reflecting improved productivity in the current period. This uplift was partially offset by reduced production associated with a planned minor maintenance outage at the Company's Intercontinental NBSK pulp mill in the current quarter.
Operating income in the Company's paper segment was
Pulp outlook.
Looking ahead, global softwood kraft pulp market conditions are anticipated to remain weak during the fourth quarter of 2025 as economic uncertainty, particularly between
In addition, in the fourth quarter of 2025, a maintenance outage is scheduled at the Company's Northwood NBSK pulp mill which is projected to reduce NBSK market pulp production by 10,000 tonnes.
Consequently, Management's forecast indicates that a decline in the Company's results in the fourth quarter, correlated in part with the reduced production associated with the scheduled maintenance outage, combined with ongoing macroeconomic headwinds, could leave the Company with minimal headroom under its financial covenants and create a risk of non-compliance as early as
Management is working to mitigate this risk of non-compliance by implementing cost-saving measures and deferring certain capital expenditures to improve the Company's financial position. However, the Company's ability to maintain covenant compliance and execute these plans is subject to a number of uncertainties including market volatility, execution risk and the achievement of forecast cash flows. Management is actively negotiating with its lenders in an effort to obtain a waiver for the potential future breach of its financial covenants.
Paper outlook.
The subdued demand for bleached kraft paper globally and in
Additional information and conference call.
A conference call to discuss the third 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) |
|
Q3 2025 |
|
Q2 2025 |
|
YTD 2025 |
|
Q3 2024 |
|
YTD 2024 |
|
||||
|
Reported operating loss |
$ |
(16.0) |
$ |
(5.3) |
$ |
(10.5) |
$ |
(209.3) |
$ |
(230.6) |
|
||||
|
Asset write-down and impairment |
$ |
- |
$ |
- |
$ |
- |
$ |
211.0 |
$ |
211.0 |
|
||||
|
Inventory write-down |
$ |
4.9 |
$ |
2.9 |
$ |
7.8 |
$ |
- |
$ |
- |
|
||||
|
Adjusted operating income (loss) |
$ |
(11.1) |
$ |
(2.4) |
$ |
(2.7) |
$ |
1.7 |
$ |
(19.6) |
|
||||
|
Amortization |
$ |
8.8 |
$ |
8.8 |
$ |
28.1 |
$ |
17.1 |
$ |
50.6 |
|
||||
|
Adjusted operating income (loss) before amortization, asset write-down and impairment |
$ |
(2.3) |
$ |
6.4 |
$ |
25.4 |
$ |
18.8 |
$ |
31.0 |
|
||||
|
|
|||||||||||||||
|
(millions of Canadian dollars) |
|
Q3 2025 |
|
Q2 2025 |
|
YTD 2025 |
|
Q3 2024 |
|
YTD 2024 |
|
||||
|
Net loss |
$ |
(12.4) |
$ |
(6.7) |
$ |
(13.1) |
$ |
(156.1) |
$ |
(164.8) |
|
||||
|
Asset write-down and impairment, net of tax |
$ |
- |
$ |
- |
$ |
- |
$ |
154.0 |
$ |
154.0 |
|
||||
|
Adjusted net loss |
$ |
(12.4) |
$ |
(6.7) |
$ |
(13.1) |
$ |
(2.1) |
$ |
(10.8) |
|
||||
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
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