Canfor Corp. reported late Thursday that its net income increased roughly eight-fold to C$33.5 million (US$32.8 million) in the third quarter from C$4.1 million in the year-earlier period. Sales rose 13% to C$588.7 million (US$576.3 million).
EBITDA--earnings before interest, taxes, depreciation, and amortization--totaled C$66 million in the July-to-September period vs. just C$7 million a year before.
While up sharply from a year earlier, the third quarter's results marked a decline compared with the second quarter's net income (C$40.4 million), sales (C$634.7 milllion), and EBITDA (C$102.5 million).
"North American lumber market activity was subdued in the third quarter as the weak U.S. economy and the troubled U.S. housing market continued to weigh on the sector," the Vancouver-based company said in a statement. "Average lumber prices in North America were well down from the previous quarter when prices were boosted by a short-lived price rally that ended abruptly in May. Western SPF lumber prices edged up in August and September mostly due to seasonal factors and rising demand from China, while prices for Southern Yellow Pine lumber products continued to slide well into the third quarter before stabilizing in September. Sales realizations from offshore markets, the majority of which are negotiated quarterly or monthly in advance, showed a modest increase compared to the second quarter."
Canfor's lumber segment halved its operating loss to C$18 million in the third quarter from $36.3 million a year earlier as sales rose 9.6% to C$308.3 million. That enabled it to swing to postive EBITDA of C$4.8 million from last year's negative C$14.6 million.
Looking ahead, Canfor predicted demand in North America will remain steady through this year, but sales to offshore market are growing. "Several end-use markets in China are now solidly established and are expected to result in higher lumber demand in the fourth quarter," it said.