Canfor swings to big profits in Q3
Canadian lumber producer Canfor reported that third quarter sales increased more than 38% to 1.55 billion Canadian dollars (US$1.18 billion) from third quarter 2019 sales of C$1.12 billion (US$851.5 million).
The Vancouver, British Columbia-based supplier also reported a third quarter net income of C$218.1 million (US$165.8 million), marking a huge swing from a net loss of C$88.5 million (US$67.3 million) in the third quarter a year ago.
Providing a big lift in the third quarter were record-high adjusted lumber earnings of C$387 million (US$294.3 million), driven by a massive surge in lumber prices and strong operational performance across all regions despite the impact of the coronavirus pandemic, Canfor said.
North American benchmark lumber pricing jumped to unprecedented levels in the third quarter of 2020, resulting in record results for the Company’s Southern Yellow Pine (SYP) and European Spruce/Pine/Fir (SPF) operations and a significant improvement in the results for the company’s Western SPF operations.
Canfor’s total lumber shipments, at 1.37 billion board feet, were 19% higher than the previous quarter, principally due to increased production.
Total lumber production, at 1.42 billion board feet, was 36% above the prior quarter primarily due to a return to more regular production rates following COVID-19 market-related curtailments across the Company’s Western SPF and SYP operations early in the second quarter, offset in part by four weeks of seasonal production downtime at the company’s European SPF operations in July and August.
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The Bottom Line: Lumber prices help Canfor swing to a net income of C$218.1 million (US$165.8 million) following big losses in the third quarter 2019.
What the CEO said: “While we were very pleased with the significant increase in global lumber pricing and the performance of our all our operations in the third quarter, we anticipate a moderation in prices through the fourth quarter,” said Don Kayne, president and CEO of Canfor. “Although we forecast lumber demand to remain strong in 2021, we will continue to focus on strengthening our balance sheet to mitigate future potential volatility in global markets.”
Company info: Canfor’s full third quarter financial report is available here.