Canfor Corp.'s lumber operations swung to a C$17 million (US$16.5 million) operating profit in the second quarter from a C$12 million loss in the year-earlier period in part because sales rose 17.1% to C$336.9 million, the Vancouver-based forest products giant reported today.
EBITDA--earnings before interest, taxes, depreciation, and amortization--jumped to C$38.9 million from C$10.6 million in April-June 2009. Shipments of Canfor-produced lumber were substantially unchanged from year to year at 835 million board feet, but prices were among their highest in several years. On the other hand, the Canadian dollar strengthened by 13% from 2Q09 to 2Q10, limiting some of those upside gains for a company that measures its revenues in Canadian currency but sells a lot of goods in U.S. dollars.
Counting pulp and other operations, Canfor's total net income more than tripled to C$40.4 million from C$12.1 million, while EBITDA soared to C$102.2 million from C$7.3 million. Sales rose 19.7% to C$634.7 million.
As encouraging as it has been to see another quarter of improved results, the significant decline in solid wood prices in the latter part of the quarter clearly highlights the fragility of the U.S. housing sector," president and CEO Jim Shepard said. "Looking ahead, North American lumber demand is projected to improve slightly as the seasonal fall building season gets underway in August and September. However, mortgage delinquencies, home foreclosures and continued weak U.S. employment are expected to continue to hinder the U.S. housing recovery.
"The resilience of the offshore market is expected to persist as strong lumber demand continues in China and Japan for both housing construction and remanufacturing and do-it-yourself markets," Shepard added.