Canfor Pulp Products Reports Third Quarter 2023 Results
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Canfor Pulp Products Inc. on Nov. 2 reported its third quarter of 2023 results.
Overview
• Q3 2023 reported operating loss of $49 million; net loss of $36 million, or $0.55 per share
• Stable global pulp market fundamentals throughout the quarter, as a slight uptick in purchasing activity in China was offset by ongoing challenging conditions in other global regions
• Northwood NBSK Pulp Mill scheduled maintenance downtime and inspection of recovery boiler number one completed as planned; restart delayed due to operational challenges
The Company reported an operating loss of $49.3 million for the third quarter of 2023, compared to an operating loss of $37.9 million for the second quarter of 2023. After taking into consideration a net $2.0 million reversal of a previously recognized inventory write-down, the Company's adjusted operating loss was $51.3 million for the third quarter of 2023, compared to an adjusted operating loss of $31.0 million for the second quarter of 2023. These results principally reflected the continuation of soft global pulp market conditions throughout most of the current period combined with extensive downtime at the Company's Northwood Northern Bleached Softwood Kraft ("NBSK") pulp mill ("Northwood") driven by supply chain disruptions and scheduled maintenance, as well as persistent reliability challenges and a delayed restart. When combined, these factors drove a significant unfavourable timing lag in the Company's shipments (versus orders) and led to a substantial decline in the Company's NBSK pulp sales unit realizations in the current quarter.
Commenting on the Company's third quarter of 2023 results, CPPI's President and Chief Executive Officer, Kevin Edgson, said, "Clearly, this was a difficult quarter for our pulp business as global pulp market conditions continued to be challenged with high pulp producer inventories and tepid demand. Market conditions, however, appear to be showing some signs of improvement, but we remain cautious in our market outlook given general global economic pressures.
"Operationally, while downtime weighed heavily on our third quarter results, we completed our scheduled maintenance outage at Northwood on time and on budget with positive results received from the inspections of our recovery boilers. Notwithstanding the successful execution of this scheduled maintenance downtime, the restart of Northwood has been hampered with operational challenges. We appreciate the efforts, perseverance and focus of our employees on Northwood's scheduled maintenance outage and re-start and we are focused on continuing to improve productivity and reliability going forward," Edgson said.
