Canfor Corporation (TSX: CFP) today reported a net loss attributable to shareholders (“shareholder net loss”) of $44.1 million, or $0.31 per share, for the fourth quarter of 2011, compared to a shareholder net loss of $21.6 million, or $0.15 per share, for the third quarter of 2011 and shareholder net income of $32.9 million, or $0.23 per share, for the fourth quarter of 2010. For the year ended December 31, 2011, the Company’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.
U.S. housing activity saw a modest improvement in the fourth quarter of 2011, aided by unseasonably mild weather and a slight improvement in the U.S. economy. U.S. housing starts for the quarter averaged 657,000 units (seasonally adjusted annual rate), up 8% from the previous quarter, though much of the increase related to multifamily units, which use a lower proportion of lumber than single family units. While the Company’s offshore
lumber shipments remained at high levels in the quarter, sales realizations were adversely impacted by softer demand, particularly for lower lumber grades.
Lumber shipments were in line with the previous quarter at just under one billion board feet. Production was down
7%, for the most part reflecting downtime taken over the Christmas period, which pushed up unit cash conversion
costs, along with seasonally higher energy consumption. Higher unit log costs in the period reflected a shortage of
log truckers in parts of the BC Interior in the quarter, along with unseasonably mild weather and higher diesel prices.
These increases were partially mitigated by continuing improved productivity at operations upgraded during the year.
Commenting on the quarter, 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. To mitigate log cost pressures we have made significant strides in addressing trucker availability, while we continue
to see positive trends in productivity, lumber recoveries and conversion costs from our capital investment and continuous improvement initiatives. We expect to see further benefits from our capital investment program in 2012.”