- Q1 2022 reported operating income of
$742 million driven by strong lumber segment results with near record-high North American lumber pricing and strong earnings for the Company's European lumber operations - Shareholder net income of
$534 million , or$4.29 per share - Completed acquisition of
Millar Western Forest Products Ltd.'s ("Millar Western") solid wood operations and associated tenure for$440 million , including net working capital - Announced
$165 million (US$130 million ) investment in the US South to significantly upgrade and expand Urbana's sawmill and planer facility - Announced the implementation of a comprehensive plan to achieve net-zero carbon emissions by 2050
The following table summarizes selected financial information for the Company for the comparative periods:
(millions of Canadian dollars, except per share amounts) | Q1 | Q4 | Q1 | |||||||
2022 | 2021 | 2021 | ||||||||
Sales | $ | 2,213.3 | $ | 1,571.3 | $ | 1,941.8 | ||||
Reported operating income before amortization and impairments | $ | 830.7 | $ | 321.7 | $ | 696.7 | ||||
Reported operating income (loss) | $ | 741.9 | $ | (66.8) | $ | 602.6 | ||||
Adjusted operating income before amortization and impairments1 | $ | 829.6 | $ | 311.3 | $ | 694.5 | ||||
Adjusted operating income1 | $ | 740.8 | $ | 216.3 | $ | 600.4 | ||||
Net income (loss)2 | $ | 534.0 | $ | (23.1) | $ | 427.8 | ||||
Net income (loss) per share, basic and diluted2 | $ | 4.29 | $ | (0.19) | $ | 3.42 | ||||
Adjusted net income1, 2 | $ | 529.0 | $ | 154.6 | $ | 434.2 | ||||
Adjusted net income per share, basic and diluted1, 2 | $ | 4.25 | $ | 1.24 | $ | 3.47 | ||||
1 Adjusted results referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the | ||||||||||
2 Attributable to equity shareholders of the Company. | ||||||||||
For the first quarter of 2022, the Company reported operating income of
Commenting on the Company's first quarter results, Canfor's President and Chief Executive Officer,
In the lumber segment, adjusted earnings increased
North American market conditions remained very strong through much of the first quarter of 2022, primarily led by continued strength in new home construction activity. Significant demand against a backdrop of tight supply, largely stemming from supply chain disruptions, resulted in the aforementioned increase in North American benchmark lumber prices in the current quarter. Towards the end of the current quarter, however, elevated material costs, tied to the raised benchmark lumber prices, combined with growing concerns around housing affordability and higher interest rates, dampened consumer spending in the "do-it-yourself" sector.
Offshore lumber demand in
After a modest decline in the prior quarter,
Results in the pulp and paper segment principally reflected supply-driven increases in Northern Bleached Softwood Kraft ("NBSK") pulp US-dollar prices that were significantly moderated by the ongoing impacts of global supply chain challenges and transportation disruptions in
Looking ahead, global lumber market fundamentals are anticipated to remain strong through the second quarter of 2022. New home construction in
Offshore lumber demand in
Results in the second quarter will reflect reduced operating schedules across the Company's Western Canadian lumber operations as a result of the cumulative effects of the supply chain crisis that has been ongoing for several months. The Company will continue to closely monitor the supply chain situation and will adjust future lumber operating schedules, as appropriate, through the balance of the second quarter and into latter half of 2022.
In addition, the permanent reduction of 150 million board feet of production capacity at the Company's Plateau sawmill in BC is anticipated to take effect at the end of the second quarter of 2022. The resizing will align the facility with the reduction in available, sustainable timber supply in the region following the Mountain Pine Beetle infestation and other constraints on the timber harvesting land base.
For the pulp and paper segment, results in the second quarter of 2022 are anticipated to reflect in part, the near record-high US-dollar pulp list pricing seen in the first quarter of 2022. However, the intermittent and limited rail service experienced in BC in the first quarter of 2022 is projected to continue well into the second quarter, putting sustained pressure on CPPI's operations and shipments through the coming months, including, as previously announced, the extension of a transportation-related curtailment at CPPI's Taylor BCTMP mill ("Taylor") by at least a further six-weeks, with a projected 25,000 tonnes of reduced BCTMP production. CPPI will continue to closely monitor the ongoing supply chain challenges and will adjust future operating plans accordingly, through the balance of the second quarter and 2022.
In addition, CPPI's results in the second quarter of 2022 will reflect the impact of the RB1 capital-related outage at Northwood into mid-April (approximately 10,000 tonnes), as well as a scheduled maintenance outage at Northwood in the latter part of the second quarter, with a projected 25,000 tonnes of reduced NBSK pulp production. With the RB1 rebuild now complete, a key focus of CPPI's kraft pulp mills for the balance of 2022 will be on improving operational reliability and closely managing manufacturing and fibre costs.
A conference call to discuss the first quarter's financial and operating results will be held on
Throughout this press release, reference is made to certain non-IFRS financial measures which are used to evaluate the Company's performance but are not generally accepted under IFRS and may not be directly comparable with similarly titled measures used by other companies. The following table provides a reconciliation of these non-IFRS financial measures to figures reported in the Company's condensed consolidated interim financial statements:
(millions of Canadian dollars) | Q1 | Q4 | Q1 | |||||||
2022 | 2021 | 2021 | ||||||||
Reported operating income (loss) | $ | 741.9 | $ | (66.8) | $ | 602.6 | ||||
Asset impairments | $ | - | $ | 293.5 | $ | - | ||||
Inventory write-down (recovery), net | $ | (1.1) | $ | 1.1 | $ | (2.2) | ||||
Restructuring, mill closure and other items, net | $ | - | $ | (11.5) | $ | - | ||||
Adjusted operating income | $ | 740.8 | $ | 216.3 | $ | 600.4 | ||||
Amortization | $ | 88.8 | $ | 95.0 | $ | 94.1 | ||||
Adjusted operating income before amortization and impairments | $ | 829.6 | $ | 311.3 | $ | 694.5 | ||||
After-tax impact, net of non-controlling interests | Q1 | Q4 | Q1 | |||||||
(millions of Canadian dollars) | 2022 | 2021 | 2021 | |||||||
Net income (loss) | $ | 534.0 | $ | (23.1) | $ | 427.8 | ||||
Foreign exchange (gain) loss on term debt | $ | (3.0) | $ | 0.2 | $ | (2.6) | ||||
(Gain) loss on derivative financial instruments | $ | (2.0) | $ | 3.0 | $ | 9.0 | ||||
Asset impairments | $ | - | $ | 182.9 | $ | - | ||||
Restructuring, mill closure and other items, net | $ | - | $ | (8.4) | $ | - | ||||
Adjusted net income3 | $ | 529.0 | $ | 154.6 | $ | 434.2 | ||||
3 Attributable to equity shareholders of the Company. | ||||||||||
Certain statements in this press release constitute "forward-looking statements" which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Words such as "expects", "anticipates", "projects", "intends", "plans", "will", "believes", "seeks", "estimates", "should", "may", "could", and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and actual events or results may differ materially. There are many factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements. Forward-looking statements are based on current expectations and Canfor assumes no obligation to update such information to reflect later events or developments, except as required by law.
Canfor is a leading integrated forest products company based in
SOURCE
© Canada Newswire, source