Canada will continue to be a major supplier of softwood lumber to the US in the next decade, with...
Canfor reports results for third quarter of 2018
Canfor reported operating income of $201.8 million for the third quarter of 2018, down $80.3 million from reported operating income of $282.1 million for the second quarter of 2018, with the decline reflecting lower operating earnings in both the lumber and pulp and paper segments. Reported results for the third quarter of 2018 included a net duty expense of $42.6 million, at a current effective countervailing duty (“CVD”) and anti-dumping duty (“ADD”) rate of 14.94%, compared to $51.7 million reported in the second quarter of 2018. After adjusting for duties, operating income was $244.4 million for the third quarter of 2018, down $89.4 million from similarly adjusted operating income in the second quarter of 2018.
Adjusted lumber segment earnings primarily reflected steep declines in Western Spruce/Pine/Fir (“Western SPF”) and Southern Yellow Pine (“SYP”) benchmark lumber prices, and to a lesser extent, the disruptive impacts of severe forest fires in Western Canada, and Hurricane Florence in the US South, which contributed to significant cost pressures and temporary operational downtime as a result of limited log deliveries and evacuation alerts. Pulp and paper segment earnings largely reflected a 20% decrease in pulp shipments that was mostly timing-related, and to a lesser extent, higher market-driven fibre costs.