Canfor Corp.'s lumber segment late Wednesday reported EBITDA (earnings before interest, taxes, depreciation, and amortization) of C$34 million (US$32.7 million) in the first quarter, swinging from a year-earlier EBITDA loss of C$68.8 million (US$65.2 million). Sales rose 10.7% to C$292 million (US$280.6 million).
The Vancouver, B.C.-based company credited much of the improved picture to the significant hikes in average prices from the year before for western SPF (spruce-pine-fir) and southern yellow pine. Shipments actually were down 12%, to 758 million board feet, in the quarter as buyers chose instead to draw down inventories. Demand from China and other offshore markets helped counter some of the continued sting from the U.S. housing market's downturn.
Operating income swung to a profit of C$11.8 million (US$11.3 million) from a loss of C$92.3 million (US$87.4 million) in the January-March 2009 period.
"Looking ahead, the second quarter should see a moderate pickup in lumber demand, reflecting seasonally higher North American housing starts and repair and renovation activity," the company said. "New and existing home inventories in the U.S. are expected to remain close to current levels as mortgage delinquency and home foreclosures continue to weigh on the housing recovery. In Canada, lumber consumption is expected to ease as mortgage rates rise. Offshore shipments are expected to remain strong, as demand continues to climb in China and Japan markets.
"As a result of historically low operating rates and lower B.C. Interior log harvesting activity in the most recent winter logging season, western SPF lumber may be in shorter supply," the company added. That factor "could help to support current price levels for much of the second quarter," it added.
The company production of SPF lumber slipped 0.8% in the quarter to 696 million board feet, while production of southern yellow pine climbed 36.2% to 85 million board feet.
Canfor describes itself as the biggest softwood lumber producer in British Columbia. It also has interests in the Canadian provinces of Alberta and Quebec as well as in the U.S. states of Washington, North Carolina and South Carolina.
(Editor's Note: This story based its conversions from Canadian to U.S. dollars on Canfor's estimate that C$1 equaled 96.1 U.S. cents in the first quarter of 2010 and 94.7 U.S. cents in the first quarter of 2009.)