Overview
- 2023 operating loss of
$128 million ; net loss of$96 million , or$1.47 per share - Q4 2023 operating loss of
$15 million ; net loss of$13 million , or$0.20 per share - Moderate uplift in global pulp market fundamentals through the fourth quarter driven by a slight increase in demand and purchasing activity in most major regions
- 20% increase in pulp production in the fourth quarter reflecting improved operating performance at both the Northwood and Intercontinental NBSK pulp mills
- Persistent challenges associated with the availability of economic fibre in
British Columbia
Financial Results
The following table summarizes selected financial information for CPPI for the comparative periods:
Q4 | Q3 | YTD | Q4 | YTD | ||||||
(millions of Canadian dollars, except per share amounts) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||
Sales | $ | 193.9 | $ | 188.8 | $ | 875.5 | $ | 268.1 | $ | 1,085.6 |
Reported operating income (loss) before amortization, | $ | 1.1 | $ | (27.7) | $ | (42.5) | $ | (15.1) | $ | 41.4 |
Reported operating loss | $ | (15.1) | $ | (49.3) | $ | (127.5) | $ | (91.1) | $ | (106.0) |
Adjusted operating income (loss) before amortization, | $ | (9.8) | $ | (29.7) | $ | (44.9) | $ | (15.6) | $ | 39.2 |
Adjusted operating loss1 | $ | (26.0) | $ | (51.3) | $ | (129.9) | $ | (42.0) | $ | (58.6) |
Net loss | $ | (13.2) | $ | (35.7) | $ | (96.1) | $ | (69.8) | $ | (79.1) |
Net loss per share, basic and diluted | $ | (0.20) | $ | (0.55) | $ | (1.47) | $ | (1.07) | $ | (1.21) |
Adjusted net loss1 | $ | (13.2) | $ | (35.7) | $ | (96.1) | $ | (33.6) | $ | (42.9) |
Adjusted net loss per share, basic and diluted1 | $ | (0.20) | $ | (0.55) | $ | (1.47) | $ | (0.52) | $ | (0.66) |
1 Adjusted results referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the "Non-IFRS Financial Measures" section of this document. |
2023 was a difficult year for
With continuing fibre cost pressures and a declining outlook for economic residual fibre in BC, in
For the fourth quarter of 2023, the Company reported an operating loss of
Commenting on the Company's 2023 and fourth quarter of 2023 results, CPPI's President and Chief Executive Officer,
Fourth Quarter Highlights
Following a relatively weak second and third quarter of 2023, global softwood pulp markets moderately improved in the current quarter, largely reflecting a slight uptick in demand and purchasing activity in most major regions as global pulp producer inventories returned to a more balanced range, ending
Upon the successful completion of a scheduled maintenance outage in September, the restart of the Company's Northwood NBSK pulp mill ("Northwood") was delayed into the fourth quarter of 2023, resulting in reduced NBSK pulp production early in the current period. For the quarter overall however, the operating performance at Northwood and Intercon continued to improve as the quarter progressed, resulting in a 20% increase in pulp production in the current period.
Operating income in the Company's paper segment was
Outlook
Looking forward, global softwood kraft pulp markets are projected to be fairly subdued through the first quarter of 2024. While global pulp producer inventories are estimated to remain within the balanced range, demand uncertainty is anticipated, driven principally by the deceleration in
The Company has no major maintenance outages planned for the first quarter of 2024. In the second quarter of 2024, a maintenance outage is scheduled at Intercon, with a projected 5,000 tonnes of reduced NBSK market pulp production.
Given the ongoing uncertainty with regards to the availability of economically viable fibre in BC and a projected weak North American lumber market, the Company anticipates a challenging fibre supply environment for its pulp mills (both for sawmill residual chips and whole-log chips), especially in the near-term. The Company will continue to monitor operating conditions and will adjust operating rates at its pulp mills to align with economically viable fibre supply.
Bleached kraft paper markets are projected to remain solid through the first quarter of 2024 as the uptick in global paper demand towards the end of 2023 is anticipated to continue. A maintenance outage is currently planned at the Company's paper machine in the second quarter of 2024 with a projected 5,000 tonnes of reduced paper production.
Refer to the Company's annual Management's Discussion and Analysis for further discussion on the Company's results for the fourth quarter of 2023 on page 16.
Additional Information and Conference Call
A conference call to discuss the fourth quarter's financial and operating results will be held on
Non-IFRS Financial Measures
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 consolidated financial statements:
Q4 | Q3 | YTD | Q4 | YTD | ||||||
(millions of Canadian dollars) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||
Reported operating loss | $ | (15.1) | $ | (49.3) | $ | (127.5) | $ | (91.1) | $ | (106.0) |
Asset write-down and impairment | $ | - | $ | - | $ | - | $ | 49.6 | $ | 49.6 |
Inventory write-down (recovery), net | $ | (10.9) | $ | (2.0) | $ | (2.4) | $ | (0.5) | $ | (2.2) |
Adjusted operating loss | $ | (26.0) | $ | (51.3) | $ | (129.9) | $ | (42.0) | $ | (58.6) |
Amortization | $ | 16.2 | $ | 21.6 | $ | 85.0 | $ | 26.4 | $ | 97.8 |
Adjusted operating income (loss) before | $ |
(9.8) | $ | (29.7) | $ |
(44.9) | $ |
(15.6) | $ |
39.2 |
Net loss | $ | (13.2) | $ | (35.7) | $ | (96.1) | $ | (69.8) | $ | (79.1) |
Asset write-down and impairment, net of tax | $ | - | $ | - | $ | - | $ | 36.2 | $ | 36.2 |
Adjusted net loss | $ | (13.2) | $ | (35.7) | $ | (96.1) | $ | (33.6) | $ | (42.9) |
Forward Looking Statements
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 the Company assumes no obligation to update such information to reflect later events or developments, except as required by law.
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