Canfor Corp. reported an operating loss of $559.7 million for the third quarter adding to the operating loss of $250.8 million it reported in the second quarter.
The lumber and paper producer said it continued to encounter operational challenges, including limited access to economic fibre, weak lumber market conditions, rising operating costs, increased export tariffs to the United States, plus various regulatory complexities.
As a result, Canfor decided to permanently close its Plateau and Fort St. John sawmill operations in northern British Columbia. In connection with these closures, in the third quarter of 2024 the company recognized an asset write-down and impairment charge of $100.3 million to reduce the carrying value of its lumber segment assets, as well as $38.6 million in restructuring costs.
The lumber segment accounted for $336.2 million of the third quarter operating loss, compared to the previous quarter’s operating loss of $230.5 million. These results reflected the ongoing weakness in North American lumber markets and pricing in the current quarter, particularly in the U.S. South. These conditions were accompanied by lower lumber production and shipment volumes, driven by continued curtailments in British Columbia, a full quarter impact of the April 2024 closure of Polar, as well as market and capital project related downtime in the U.S. South.
“This was another extremely challenging quarter for our lumber business,” said Don Kayne, president and CEO of Canfor. “While Alberta and Europe delivered positive results, our North American operations continued to face a persistently weak pricing environment. In B.C., a complex operating environment exacerbated this depressed pricing, high costs, rising U.S. tariffs and ongoing difficulties in reliably accessing sufficient economic fibre. These conditions have resulted in unsustainable financial losses from our B.C. operations. As a result, we made the very difficult decision to close both our Plateau and Fort St. John operations in northern B.C. by the end of 2024.”
