|
Further cost reductions, higher pulp revenue and a foreign exchange translation gain on U.S. dollar debt helped limit Canfor Corp.'s (TSX:CFP) third-quarter net loss. The Vancouver-based lumber giant reported a net loss for the quarter of $5.2 million ($0.04 per share) compared with a net loss of $94.2 million ($0.66 per share) for the same period last year. However, Canfor posted net income of $10.5 million for 2009's second quarter. The company said its latest results were dragged down by the weak U.S. housing market, but were boosted by several one-time items that had an overall positive impact on net income of $27 million. Its adjusted net loss for the quarter was $32.2 million ($0.23 per share). For the nine months ended September 30, 2009, the company's net loss was $53.5 million, compared with a net loss of $115.4 million for the comparable period in 2008. U.S. housing starts showed a marginal improvement through the third quarter, but remain at very depressed levels, said Canfor, which operated at approximately 50% of lumber capacity for the quarter. It said that western spruce/pine/fir two-by-four lumber prices showed modest gains in the quarter, mostly in response to additional curtailment and concerns over supply disruption, but prices retreated from their August highs toward the end of the quarter. Driven primarily by historically low global inventory levels and a higher demand, pulp prices continued to rise. For its Canadian operations, the pricing gains were offset somewhat by a stronger Canadian dollar in the quarter. Jim Shepard, Canfor president and CEO, said cash conservation continues to be a primary focus, including limiting capital spending to essential projects. In addition, the company will curtail lumber production at most of its sawmills over the Christmas period, reducing production by approximately 37 million board feet of SPF lumber. At the end of the third quarter, Canfor had $153 million in cash and $413 million in untapped lines of credit. This puts Canfor in an enviable position to diversify its B.C.-centric asset base, lower its exposure to the rising Canadian dollar and attract some management talent, RBC Dominion Securities Inc. analyst Paul Quinn said in a research note. By press time, Canfor shares on the Toronto Stock Exchange were trading at $6.15, up from $4.38 in March this year. Quinn raised his price target on the stock to $6 from $4.75 after the release of Canfor's results.
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
|
