Canfor continues to struggle, according to its latest quarterly report. On Wednesday the company reported a shareholder net loss of $44.1 million for the fourth quarter of 2011, compared to a shareholder net loss of $21.6 million for the third quarter of 2011 and shareholder net income of $32.9 million for the fourth quarter of 2010.
For the year ended Dec. 31, 2011, Canfor’s shareholder net loss was $56.6 million, or $0.40 per share, compared to shareholder net income of $81.4 million, or $0.57 per share, for 2010.
Canfor’s president and CEO Don Kayne said, “The fourth quarter provided challenges on several fronts. We saw weaker lumber and NBSK pulp realizations, related in part to the slowdown in demand from China, particularly for lower lumber grades, the ongoing slow U.S. recovery and overall global economic issues.”
Lumber shipments were in line with the previous quarter at just under one billion board feet. Production was down seven per cent, for the most part reflecting Christmas downtime. Higher unit log costs reflected a shortage of log truckers in parts of the B.C. Interior, along with unseasonably mild weather and higher diesel prices.
These increases were partially mitigated by continuing improved productivity at operations upgraded during the year.
According to the company, the North American lumber market is forecast to improve modestly as the U.S. economy continues on its slow road to recovery, while the Canadian housing market is projected to remain steady. Strong offshore demand is anticipated to continue into 2012. Shipments to China have picked up in early 2012 after slowing in advance of the Lunar New Year, although prices for lower grade lumber are forecast to remain at low levels through the first quarter.
The company continued to make progress on the $300 million, three-year strategic capital investment program at its lumber operations during the quarter, completing new energy systems at its Plateau and Chetwynd sawmills, planer and logyard upgrades at its Grande Prairie mill, and a planer upgrade at its Prince George sawmill. The company’s recently upgraded Vavenby sawmill, which restarted in September on one shift, transitioned to two shifts recently.