Restructured Canfor reports net loss, but maintains cautious confidence for future

Canfor Corp. continued to weather the storm of poor lumber markets in its latest financial quarter, reporting an $88 million net loss for the three months ending Sept. 30, although CEO Susan Yurkovich pointed to “relative stability” in its operating position.

The company released its third-quarter report Wednesday, which showed that net loss of $88 million on revenue of $1.28 billion. That was an improvement on the $172 million loss on $1.26 billion in revenue for the same quarter a year ago.

The company also spelled out a more positive picture of operating profits of $98 million before adjustments for interest, taxes and depreciation, at its operations in Europe and North America. For the year to date at Sept. 30, that figure was $262 million.

“Despite continued uncertainty across our markets, our lumber business delivered relatively stable earnings across all regions in the third quarter,” Yurkovich said in a company news release.

On a call with analysts, Yurkovich added that its decisions over the years to downsize and close mills have made Canfor “a more resilient company that is well-positioned to capitalize on strong lumber fundamentals over the medium- to long-term.”

Its latest decisions were announced in July, with the closure of its Fox Creek sawmill in Alberta and the Northwood pulp mill in Prince George, which is expected to wind down operations by the end of the year.

Those closures “will support additional cost improvements as we head into 2027,” Yurkovich said, although they continue to weather difficult markets and the impact of punitive U.S. softwood lumber duties.

In a small silver lining, she noted the burden of those duties has been reduced to 31 per cent for the coming year from almost 48 per cent the previous year.

While the industry is still enduring tough conditions, including market lumber prices that are below break-even, equity analyst John Cooney called Canfor’s results “a very strong quarter against a very difficult backdrop for North American lumber markets.”

Cooney, with the Sunshine Coast firm ERA Forest Products Research, said the results are “a demonstration of this leaner and meaner Canfor” after closing some 17 sawmills over the past decade.

“Its had a lot of upheaval, but we’re now sort of seeing the benefits of this new operating platform,” Cooney said.

What is more of an open question is whether B.C.’s recent change in government, with the incoming B.C. Conservatives having made significant promises to the forest sector, might have a material impact on the operations of companies such as Canfor.

A week ago, however, competitor West Fraser Timber said it wouldn’t comment on “any particular” political platform as it reported an $80 million loss on $1.4 billion in revenue for its third quarter.