International Forest Products Ltd. (Interfor) recorded net income of C$1.5 million (US$1.47 million) in the third quarter, primarily because of the C$4.8 million gain it took on selling two ships and the C$1.6 million tax valuation allowance it took. Excluding those extraordinary items, Interfor reported late Thursday a net loss for the quarter of C$1 million (US$977,000), improving on its C$5.3 million loss in 2009's third quarter.
Sales at the Vancouver-based company rose 44% to C$151.5 million. In volume terms, sales rose by 7 million board feet, or 2.6%, from the second quarter to total 277 million board feet. Sales to North American markets declined to 66% of the total from 78% in the second quarter while sales to Pacific Rim markets--particularly China and Japan--climbed to 32% of the total in July through September from 21% in April through June.
"Positive results from the start-up of our Castlegar sawmill and higher sales to China helped to offset the impact of lower prices in North America during the quarter," Duncan Davies, Interfor's president and CEO, said in a statement.
Actual production of lumber fell slightly to 272 million board feet, or 68% of capacity.
Adjusted EBITDA--earnings before interest, taxes, depreciation, and amortization, plus one-time items and "other income"--grew to C$10.6 million from C$3.6 million in the July-September 2009 period.
Looking ahead, consumption in North America "is expected to remain weak as normal seasonal conditions impact the market, commodity prices are expected to remain firm as supply and demand remain in reasonable balance," the company said.
Interfor has operations in Canada's British Columbia plus the U.S. states of Washington and Oregon.