Mining & Metals
Canfor Reports Wider Q1 Net loss On Lower, But Better Than Expected, Sales; Flags Improvement, Though Demand Still An Issue
Forest products company Canfor (CFP.TO) reported wider net loss and lower sales in the first quarter compared to a year earlier, even though sales did exceed analysts' estimates, while the company flagged "improved performance in both the lumber segment and, to a lesser extent, the pulp and paper segment" even though demand remained "relatively subdued".For the first quarter, net loss attributable to equity shareholders of the company was C$72.1 million, compared to net loss of $31 million in the corresponding year-ago quarter. Net loss per share, basic and diluted in the first quarter was $0.62 per share, compared to net loss per share, basic and diluted of $0.26 per share in the year-ago quarter.First quarter sales were $1.36 billion, compared to $1.42 billion in the year-ago quarter. The consensus estimates compiled by FactSet for sales was $1.29 billion.The company reported an operating loss of $72.5 million for the current quarter, compared to an operating loss of $415.9 million for the fourth quarter of 2025. After taking into consideration a $20.0 million reversal of a previously recognized inventory write-down, the company's adjusted operating loss was $92.5 million for the first quarter of 2026, compared to an adjusted operating loss of $145.0 million for the fourth quarter of 2025. "These results largely reflected improved performance in both the lumber segment and, to a lesser extent, the pulp and paper segment," it said in a statement."The first quarter of 2026 continued to reflect challenging market conditions across our global operations," said President and Chief Executive Officer, Susan Yurkovich. "While we saw an improvement in results, largely due to a supply-driven uptick in North American lumber pricing and higher production levels, demand remained relatively subdued. Despite ongoing trade pressures, geopolitical uncertainty, and weather related disruptions in certain regions, our focus on controllable factors helped support improved performance during the quarter. We continue to closely monitor market conditions while positioning the company to respond as conditions evolve."Yurkovich added: "Global pulp markets continued to face significant headwinds during the first quarter, with pulp producer inventories remaining elevated. As we anticipate these challenges to persist in the near-term, we remain focused on operational resilience and disciplined cost control while continuing to assess operational competitiveness."In its pulp and paper segment outlook, Canfor said a maintenance outage is scheduled at the company's Intercontinental NBSK pulp mill in the second quarter of 2026, which is anticipated to result in a reduction of approximately 20,000 tonnes of NBSK market pulp production. A maintenance outage is also planned at its paper machine with an anticipated reduction of 5,000 tonnes in paper production, it added.On lumber segment outlook, the company anticipates global lumber markets to remain affected by ongoing global trade flow disruptions, particularly given the conflict in Iran. These challenges are likely to continue to drive cost inflation and increase macroeconomic uncertainty, it said. Ongoing supply chain constraints, particularly for petroleum-based products, are anticipated to adversely affect new housing construction. "These factors are projected to further influence market dynamics and contribute to continued pricing volatility within the global lumber sector," it added.Canfor recently acquired the remaining issued and outstanding shares of Canfor Pulp Products Inc., resulting in 100% ownership of Canfor Pulp.
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