Canfor (TSX:CFP) posted a $63 million net loss in the fourth quarter of 2024 – a vast improvement over the $350 million net loss it posted earlier in Q3 2024.
Canfor’s year-end net loss for 2024 was $942 million.
Canfor’s pulp and paper division – Canfor Pulp (TSX:CFX) – reported a slight profit of $4.1 million in Q4 2024, compared to $209 million operating loss for Q3 2024.
Other B.C. forestry companies like West Fraser Timber Co. (TSX,NYSE:WFG) and Interfor Corp. (TSX: IFP) have also reported similar Q4 results, with somewhat improved sales numbers in the latter part of 2024, but overall net losses for the full year.
Lumber prices improved somewhat in the latter part of 2024. According to Madison's Lumber Reporter, the price for spruce-pine-fir (SPF) two-by-four lumber averaged US $412 per thousand board feet in 2024, up slightly from US$398 in 2023.
“Following several quarters of very weak global lumber market conditions, we were pleased to see a slight uplift in North American benchmark lumber prices during the fourth quarter, which gave rise to improved results across all our lumber operating regions,” said Susan Yurkovich, who took over as Canfor’s CEO following the retirement Don Kayne last year.
“While we anticipate subdued yet volatile market conditions to persist in the near-term, we continue to believe that longer term lumber market fundaments remain solid.”
Canfor noted the successful startup of a new sawmill it built in Axis, Alabama, as well as an expansion and modernization of its Urbana sawmill in Arkansas. These mills help insulate Canfor somewhat from punishing duties and tariffs being layered by the U.S. on Canadian lumber.
Canadian lumber producers already pay duties on exports of softwood lumber exports to the U.S., and may soon 25 per cent tariffs as well.
The U.S. Department of Commerce recently released its new preliminary anti-dumping duties, which would average 20 per cent.
When anti-dumping duties and countervailing duties are combined, Canfor will face a combined rate of 40.75 per cent in duties, the company says in its Q4 financials.
Owning sawmills in the U.S. and Europe gives Canadian companies like Canfor some insulation against duties imposed on Canadian softwood lumber imports into the U.S.
“Operationally, with our geographically diverse platform, we are well-positioned to navigate external challenges facing our lumber business, including the tariffs and increased duties on imports from Canada into the U.S,” Yurkovich said.
Canfor is looking at market diversification, however, to reduce its Canadian operations' exposure to the U.S., including market diversification within Canada.
“With a diversified operating platform in the U.S. South and Sweden, in addition to Canada, the company is well-positioned to mitigate some of these costs,” the company says in its Q4 financials.
“However, actual and potential tariffs do present challenges for the company’s Canadian operations, and, as result, the company is continuing its strategy of refocusing those products on domestic markets, particularly in Western Canada, and strengthening its presence in offshore markets.”
As for Canfor’s pulp and paper division, Canfor Pulp faces a different set of challenges. Pulp and paper are not subject to American duties, and are less exposed to the American market, but is vulnerable to the chronic shortage of wood fibre in B.C.
“For our pulp business, despite a slight improvement in market conditions late in the quarter, which resulted in an uplift in results, we continue to face external obstacles driven by persistent shortages in the availability of economic fibre in B.C.,” Yurkovich said.
