Canfor Pulp announces Q4 2010 results

Canfor Pulp Products Inc. recently announced Canfor Pulp Income Fund (the Fund) fourth quarter 2010 results as well as the results of Canfor Pulp Limited Partnership (the Partnership) in which CPPI has a 49.8% ownership.

On January 1, 2011 the Fund was converted to Canfor Pulp Products Inc., a taxable Canadian corporation.The Partnership reported record sales of $266.1 million and net income of $47.9 million, or $0.68 per unit, for the quarter ended December 31, 2010. The Partnership generated EBITDA of $58.6 million in the quarter. The Fundreported net income of $23.9 million, representing the Fund’s share of the Partnership’s net income and a future income tax recovery of $0.1 million.

In the quarter, the Partnership generated adjusted distributable cash of $48.3 million, or $0.68 per unit, and the Partnership and the Fund declared distributions of $1.05 per unit.

For the year ended December 31, 2010, the Partnership reported record revenue of $1.0 billion and generated net income of $178.0 million, EBITDA of $230.0 million and adjusted distributable cash of $207.1 million, or $2.91 per unit. Cash distributions declared during the year by the Partnership and Fund totaled $2.58 per Partnership and Fund unit.

Partnership results for the quarter were supported by increased shipment volumes, offsetting some of the impact of slightly lower prices and seasonally higher production costs. The scheduled maintenance outage at the Northwood Pulp Mill was extended for additional work on the recovery boilers and completed in the fourth quarter reducing production by 6,000 tonnes in the quarter.

Modest downward pressure was exerted on pricing in the latter half of 2010 with the restarts of the majority of Chilean pulp mills after the earthquake and two idled NBSK North American pulp mills. However, strong global softwood demand in the fourth quarter, led by China, maintained world producer and customer inventories at low levels. North American NBSK pulp list prices closed 2010 at US$960 per tonne representing a US$30 per tonne decrease from September 2010, but an increase of US$110 per tonne or 13% when compared to the closing price in 2009. Current demand remains solid with continued strong shipments into China and sustained demand in European and North America Printing and Writing paper sectors. The global softwood pulp market is expected to remain balanced through the first quarter of 2011 with the demand and supply levels expected to support current pricing. The first quarterly dividend of CPPI is expected to be declared on or about April 30, 2011, concurrent with the release of the first quarter 2011 results. As contemplated in the Fund's information circular dated March 16, 2010 (the "Circular"), the directors intend to designate such dividends as "eligible dividends" to provide eligible shareholders with the enhanced gross-up and dividend tax credit mechanism under the Canadian Income Tax Act.