Canfor Pulp reports results for the fourth quarter of 2024

VANCOUVER, BC, March 6, 2025 /CNW/ - Canfor Pulp Products Inc. ("The Company" or "CPPI") (TSX: CFX) today reported its fourth quarter of 2024 results:

Overview.

• Q4 2024 operating income of $4 million; net income of $3 million, or $0.04 per share.
• Market fundamentals remained relatively flat throughout most of the quarter, with some positive momentum late in the period as producers worked to reduce their higher-than-average inventory levels.
• 22% decrease in pulp production during Q4 2024 (versus Q3 2024) primarily due to the indefinite curtailment of one production line at its Northwood NBSK pulp mill in August 2024.
• Persistent challenges associated with the availability of economic fibre in British Columbia.

Financial results.

The following table summarizes selected financial information for CPPI for the comparative periods:

(millions of Canadian dollars, except per share amounts)		Q4 2024			Q3 2024			YTD 2024		Q4 2023		YTD 2023
Sales		$	163.1		$	193.2		$	798.6	$	193.9	$		875.5
Reported operating income (loss) before amortization, asset write-down and impairment		$	12.3		$	18.8		$	43.3	$	1.1	$		(42.5)
Reported operating income (loss)		$	4.1		$	(209.3)		$	(226.5)	$	(15.1)	$		(127.5)
Adjusted operating income (loss) before amortization, asset write-down and impairment^1		$	12.3		$	18.8		$	43.3	$	(9.8)	$		(44.9)
Adjusted operating income (loss)^1		$	4.1		$	1.7		$	(15.5)	$	(26.0)	$		(129.9)
Net income (loss)		$	2.9		$	(156.1)		$	(161.9)	$	(13.2)	$		(96.1)
Net income (loss) per share, basic and diluted		$	0.04		$	(2.39)		$	(2.49)	$	(0.20)	$		(1.47)
Adjusted net income (loss)^1		$	2.9		$	(2.1)		$	(7.9)	$	(13.2)	$		(96.1)
Adjusted net income (loss) per share, basic and diluted^1		$	0.04		$	(0.03)		$	(0.13)	$	(0.20)	$		(1.47)

1. Adjusted results referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the "Non-IFRS financial measures" section of this document.

Commenting on the Company's fourth quarter results, CPPI's President and Chief Executive Officer, Stephen Mackie, said, "We are pleased to see improved results during the fourth quarter and appreciate the resilience of our employees as we continued to transition to reduced operating capacity, as well as their focus on improving our operational performance and reliability. While market conditions have showed some signs of improvement late in the fourth quarter and early into 2025, we continue to navigate the external challenges facing our business, including the availability of economically viable fibre and the actual and potential tariffs on exports into the US."

Fourth quarter highlights.

For the fourth quarter of 2024, the Company reported operating income of $4.1 million, compared to an operating loss of $209.3 million for the third quarter of 2024. After taking account of adjusting items, including an asset write-down and impairment charge in the prior period, the Company's adjusted operating income improved $2.4 million compared to an adjusted operating income for the third quarter of 2024 of $1.7 million.

As mentioned, in August 2024, the Company completed the wind down of one production line at its Northwood Northern Bleached Softwood Kraft ("NBSK") pulp mill ("Northwood"), and as a result, during the fourth quarter of 2024, the Company's pulp segment results reflect a full quarter impact of this curtailment on pulp production (a reduction of approximately 300,000 tonnes of market kraft pulp production annually), combined with an associated impact on shipments and costs.

Notwithstanding the decline in adjusted pulp segment results in the current period, the improvement in operating income for the Company as a whole, largely reflected a moderate uplift in paper unit sales realizations, particularly to North American markets, combined with an increase in paper production quarter-over-quarter.

Global softwood pulp market fundamentals remained relatively flat through the fourth quarter of 2024, following a moderate decline in the preceding quarter. However, later in the period, global demand and purchasing activity experienced some positive momentum as producers worked to reduce their higher-than-average inventory levels. Global softwood pulp producer inventories ended December 2024 at 42 days of supply, a decline of 7 days compared to September 2024. Consequently, US-dollar NBSK list prices to China, the world's largest pulp consumer, saw a slight increase towards the end of the current quarter, ending December at US$770 per tonne. Despite this late improvement, for the current quarter overall, US-dollar NBSK pulp list prices to China averaged US$767 per tonne, down US$4 per tonne, or 1%, from the prior quarter.

Outlook.

Looking forward, global softwood pulp market conditions are projected to improve through the balance of the first quarter and into the second quarter of 2025, as global supply dynamics adjust to new hardwood capacity and as pulp producer inventories normalize. On the demand side, steady Chinese demand is anticipated to absorb these changes in supply.

The Company continues to monitor the trade situation between Canada and the US and mitigation plans are underway to mostly offset the impact of the tariffs on US shipments. With its high quality, specialty product offering and market diversification the Company is well-positioned to respond to actual and potential tariffs.

The Company remains focused on optimizing its operating footprint, enhancing operational reliability as well as closely managing manufacturing and fibre costs. Looking forward, there remains significant uncertainty with regards to the availability of economically viable fibre within BC. As a result, the Company continues to anticipate that escalating log cost pressures and transportation costs in BC will translate into a higher cost fibre supply for its pulp mills (both for sawmill residual chips and whole log chips). The Company will continue to evaluate operating conditions and adjust operating rates at its pulp mills to align with economically viable fibre supply. These factors could also affect the Company's operating plan, liquidity, cash flows and the valuation of long-lived assets.

No major maintenance outages are planned for the first and second quarters of 2025. In the third quarter of 2025 a maintenance outage is scheduled at Northwood with a projected 10,000 tonnes of reduced NBSK market pulp production. In the fourth quarter of 2025, a maintenance outage is scheduled at the Company's Intercontinental NBSK pulp mill ("Intercon"), with a projected 5,000 tonnes of reduced NBSK market pulp production.

Demand for bleached kraft paper is projected to remain steady through the remainder of the first quarter of 2025. A maintenance outage is currently planned at the Company's paper machine in the fourth quarter of 2025 with a projected 5,000 tonnes of reduced paper production.

Refer to the Company's annual Management's Discussion and Analysis for further discussion on the Company's results for the fourth quarter of 2024 on page 14.

Additional information and conference call.

A conference call to discuss the fourth quarter's financial and operating results will be held on Friday, March 7, 2025, at 8:00 AM Pacific time. To participate in the call, please dial Toll-Free 1-888-510-2154. For instant replay access until March 21, 2025, please dial Toll-Free 1-888-660-6345 and enter participant pass code 93758#.

The conference call will be webcast live and will be available at www.canfor.com. This news release, the attached financial statements and a presentation used during the conference call can be accessed via the Company's website at www.canfor.com/investor-relations/webcasts. 

Non-IFRS financial measures.

Throughout this press release, reference is made to certain non-IFRS financial measures which are used to evaluate the Company's performance but are not generally accepted under IFRS and may not be directly comparable with similarly titled measures used by other companies. The following table provides a reconciliation of these non-IFRS financial measures to figures reported in the Company's condensed consolidated interim financial statements:

(millions of Canadian dollars)			Q4 2024			Q3 2024			YTD 2024			Q4 2023				YTD 2023
Reported operating income (loss)			$		4.1	$		(209.3)	$		(226.5)	$		(15.1)		$	(127.5)
	Asset write-down and impairment		$		-	$		211.0	$		211.0	$		-		$	-
	Inventory write-down (recovery)		$		-	$		-	$		-	$		(10.9)		$	(2.4)
Adjusted operating income (loss)			$		4.1	$		1.7	$		(15.5)	$		(26.0)		$	(129.9)
	Amortization		$		8.2	$		17.1	$		58.8	$		16.2		$	85.0
Adjusted operating income (loss) before amortization, asset write-down and impairment			$		12.3	$		18.8	$		43.3	$		(9.8)		$	(44.9)

(millions of Canadian dollars, net of tax)			Q4 2024			Q3 2024			YTD 2024			Q4 2023				YTD 2023
Net income (loss)			$		2.9	$		(156.1)	$		(161.9)	$		(13.2)		$	(96.1)
	Asset write-down and impairment, net of tax		$		-	$		154.0	$		154.0	$		-		$	-
Adjusted net income (loss)			$		2.9	$		(2.1)	$		(7.9)	$		(13.2)		$	(96.1)

Forward-looking statements.

Certain statements in this press release constitute "forward-looking statements" which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Words such as "expects", "anticipates", "projects", "intends", "plans", "will", "believes", "seeks", "estimates", "should", "may", "could", and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on Management's current expectations and beliefs and actual events or results may differ materially. There are many factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements. Forward-looking statements are based on current expectations and Canfor assumes no obligation to update such information to reflect later events or developments, except as required by law.

About Canfor Pulp Products Inc.

Canfor Pulp Products Inc. ("Canfor Pulp" or "CPPI") is a leading global supplier of pulp and paper products with operations in the northern interior of British Columbia ("BC"). Canfor Pulp operates two mills in Prince George, BC with a total capacity of 780,000 tonnes of Premium Reinforcing Northern Bleached Softwood Kraft ("NBSK") pulp and 140,000 tonnes of kraft paper. CPPI shares are traded on the Toronto Stock Exchange under the symbol CFX. For more information visit canfor.com.

SOURCE Canfor Pulp Products Inc.

Media contact: Mina Laudan, VP, Corporate Communications, [phone], [email protected]; Investor contacts: Pat Elliott, CFO and Corporate Secretary, [phone], [email protected]; Dan Barwin, Director, Corporate Finance, [phone], [email protected]