Canfor Pulp Products Inc. Announces First Quarter 2019 Results and Quarterly Dividend

VANCOUVER, May 1, 2019

Overview

• First quarter of 2019 operating income of $18 million and net income of $11 million, or $0.17 per share, on sales of $304 million
• Northwood pulp mill's $65 million Turbo Generator Condensing turbine project completed and commissioned in March 2019

Financial Results

The following table summarizes selected financial information for CPPI for the comparative periods:

			Q1		Q4		Q1 ARIVA.DE Börsen-Geflüster Kurse CANFOR PULP PRODUCTS INC. 1,13 $ -6,15%
(millions of Canadian dollars, except per share amounts)			2019		2018		2018
Sales	$		304.0	$	289.7	$	359.7
Operating income before amortization	$		40.4	$	36.1	$	104.3
Operating income	$		18.1	$	15.6	$	85.1
Net income	$		10.8	$	14.2	$	64.3
Net income per share, basic and diluted	$		0.17	$	0.21	$	0.99

The Company reported operating income of $18.1 million for the first quarter of 2019, up $2.5 million from the fourth quarter of 2018, as improved production and increased shipments more than offset the impact of lower US-dollar pulp prices to China. Notwithstanding previously announced kiln-related operational disruptions at two of the Company's Northern Bleach Softwood Kraft ("NBSK") pulp mills in January and challenges associated with severe winter weather, pulp production was up 22% from the previous quarter, largely as a result of significant downtime taken at the Company's Northwood pulp mill in the comparative period to perform repairs to one of its two recovery boilers.

The weaker pulp market conditions experienced towards the end of 2018 extended into early 2019, and, as a result, global softwood pulp producer inventory levels remained well above the balanced range through the first quarter. After declining in January, NBSK pulp prices to China, the world's largest pulp consumer, showed a modest recovery to end the quarter at US$730 per tonne. The average US-dollar NBSK pulp list price to China for the first quarter of 2019 was US$710 per tonne, down US$95, or 12%, from the fourth quarter of 2018, and down US$200 per tonne compared to the first quarter of 2018. Prices to other global regions, including North America and Europe, experienced more modest declines when compared to the same comparative periods.

Despite the significantly lower US-dollar pricing to China, the Company's geographic sales mix, combined with a 1 cent, or 1%, weaker Canadian dollar, resulted in the Company's average NBSK pulp unit sales realizations moderately declining quarter-over-quarter. Average Bleached Chemi-Thermo Mechanical Pulp ("BCTMP") sales unit realizations were well down over the same period reflecting an 11% decline in average US-dollar prices. Higher energy revenues in the current quarter reflected increased energy production, seasonally higher power prices, as well as the successful commercialization ramp-up in March of the previously announced Turbo Generator Condensing turbine at the Northwood pulp mill.

Pulp production was 274,000 tonnes for the first quarter of 2019, up 50,000 tonnes, or 22%, from the previous quarter, with improved productivity and increased operating days in the current quarter more than offsetting the aforementioned kiln-related operational disruptions at the Company's Northwood and Intercontinental pulp mills in January, and, to a lesser extent, cold-weather related production challenges at all mills in February and early March. Pulp shipments were up 28,000 tonnes, or 12%, from the previous quarter mostly reflecting the higher production offset in part by the replenishment of inventory levels significantly drawn down during the fourth quarter of 2018 due to the Northwood outage.

Pulp unit manufacturing costs were moderately lower in the current quarter compared to the fourth quarter of 2018, as the benefit of increased production volumes, lower maintenance spend and reduced chemical costs in the current quarter, more than offset higher energy costs related to the aforementioned winter weather conditions, and the continued disruptive impact on natural gas supply and pricing resulting from a third-party natural gas pipeline explosion near Prince George in the fourth quarter. Fibre costs were slightly lower than the previous quarter, as seasonal pricing adjustments combined with lower market-based prices for sawmill residual chips (linked to Canadian dollar NBSK pulp sales realizations) offset an increased proportion of higher-cost whole log chips.

Operating income in the Company's paper segment was $5.9 million, up $2.4 million from the fourth quarter of 2018.  The increase largely reflected lower slush pulp costs linked to lower Canadian dollar NBSK pulp prices and, to a lesser extent, improved paper unit sales realizations.

Results in the second quarter of 2019 will include a recently completed scheduled maintenance outage at the Intercontinental NBSK pulp mill in April, which reduced NBSK pulp production by approximately 11,000 tonnes, as well as higher associated maintenance costs. Additional maintenance outages are scheduled at the Taylor BCTMP mill and the Prince George NBSK pulp mill in the second and third quarters of 2019 with a projected 5,000 tonnes of reduced BCTMP production and 6,000 tonnes of reduced NBSK pulp production, respectively. A maintenance outage is currently planned at the Company's paper machine during the third quarter of 2019 with a projected 4,000 tonnes of reduced paper production.

Commenting on the Company's first quarter of 2019 results, CPPI's Chief Executive Officer, Don Kayne said, "While our financial results showed a modest improvement compared to the last quarter of 2018, they also reflected several operational, weather and market-related challenges during the period. With Intercontinental pulp mill's scheduled shutdown now behind us, we are focused on increasing our productivity and overall financial performance going forward."  

Global softwood pulp markets are projected to remain steady through the second quarter, with inventory levels forecast to move towards a more balanced range in the latter half of 2019 reflecting a gradual drawdown of inventory following the traditional spring maintenance period, as well as the anticipated benefit of the conversion of two large NBSK pulp mills outside of North America to dissolving pulp towards the end of 2019. Fibre costs are anticipated to remain relatively stable in the second quarter; however, the current weakness in lumber markets may result in further temporary or permanent sawmill curtailments which could result in reduced availability of residual chips and an increased proportion of whole log chips. Bleached kraft paper demand is anticipated to hold relatively steady through the second quarter. 

On May 1, 2019, the Board of Directors declared a quarterly dividend of $0.0625 per share, payable on May 21, 2019 to the shareholders of record on May 14, 2019.

Additional Information and Conference Call 
A conference call to discuss the first quarter's financial and operating results will be held on Thursday, May 2, 2019 at 8:00 AM Pacific time. To participate in the call, please dial Toll-Free 1-888-390-0546. For instant replay access until May 16, 2019, please dial Toll-Free 1-888-390-0541 and enter participant pass code 594778#. The conference call will be webcast live and will be available at www.canfor.com.  This news release, the attached financial statements and a presentation used during the conference call can be accessed via the Company's website at http://www.canfor.com/investor-relations/webcasts.

Non-IFRS Measures and Forward Looking Statements
Operating Income before Amortization and Net Income per Share are not generally accepted earnings measures and should not be considered as an alternative to net income or cash flows as determined in accordance with IFRS. Refer to the Company's Annual Management's Discussion and Analysis for a reconciliation of Operating Income before Amortization to Operating Income reported in accordance with IFRS. 

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.

CPPI is a leading global supplier of pulp and paper products with operations in the central interior of British Columbia ("BC") employing approximately 1,300 people throughout the organization.  Canfor Pulp owns and operates three mills in Prince George, BC with a total capacity of 1.1 million tonnes of Premium Reinforcing Northern Bleached Softwood Kraft Pulp and 140,000 tonnes of kraft paper, as well as one mill in Taylor, BC with an annual production capacity of 220,000 tonnes of Bleached Chemi-Thermo Mechanical Pulp.  Canfor Pulp is the largest North American, and one of the largest global producers of market NBSK pulp.  CPPI shares are traded on the Toronto Stock Exchange under the symbol CFX.

Canfor Pulp Products Inc.
First Quarter 2019
Management's Discussion and Analysis

This interim Management's Discussion and Analysis ("MD&A") provides a review of Canfor Pulp Products Inc.'s ("CPPI" or "the Company") financial performance for the quarter ended March 31, 2019 relative to the quarters ended December 31, 2018 and March 31, 2018, and the financial position of the Company at March 31, 2019. It should be read in conjunction with CPPI's unaudited interim consolidated financial statements and accompanying notes for the quarters ended, March 31, 2019 and 2018, as well as the 2018 annual MD&A and the 2018 audited consolidated financial statements and notes thereto, which are included in CPPI's Annual Report for the year ended December 31, 2018 (available at www.canfor.com). The financial information in this interim MD&A has been prepared in accordance with International Financial Reporting Standards ("IFRS"), which is the required reporting framework for Canadian publicly accountable enterprises.

Throughout this discussion, reference is made to Operating Income before Amortization which CPPI considers to be a relevant indicator for measuring trends in the Company's performance and its ability to generate funds to meet its debt service and capital expenditure requirements, and to pay dividends. Reference is also made to Adjusted Net Income (calculated as Net Income less specific items affecting comparability with prior periods) and Adjusted Net Income per Share (calculated as Adjusted Net Income divided by the weighted average number of shares outstanding during the period). Operating Income before Amortization, Adjusted Net Income and Adjusted Net Income per Share are not generally accepted earnings measures and should not be considered as an alternative to net income or cash flows as determined in accordance with IFRS. As there is no standardized method of calculating these measures, CPPI's Operating Income before Amortization, Adjusted Net Income and Adjusted Net Income per Share may not be directly comparable with similarly titled measures used by other companies. Reconciliations of Operating Income before Amortization to Operating Income and Adjusted Net Income to Net Income reported in accordance with IFRS are included in this MD&A. Throughout this discussion reference is made to the current quarter which refers to the results for the first quarter of 2019. 

Factors that could impact future operations are also discussed. These factors may be influenced by both known and unknown risks and uncertainties that could cause the actual results to be materially different from those stated in this discussion. Factors that could have a material impact on any future oriented statements made herein include, but are not limited to: general economic, market and business conditions; product selling prices; raw material and operating costs; currency exchange rates; interest rates; changes in law and public policy; the outcome of labour and trade disputes; and opportunities available to or pursued by CPPI.

All financial references are in millions of Canadian dollars unless otherwise noted. The information in this report is as at May 1, 2019.

Forward Looking Statements

Certain statements in this MD&A 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.

FIRST QUARTER 2019 OVERVIEW
Selected Financial Information and Statistics

		Q1		Q4		Q1
(millions of Canadian dollars, except per share amounts)		2019		2018		2018
Operating income (loss) by segment:
Pulp	$	15.5	$	15.2	$	86.4
Paper	$	5.9	$	3.5	$	2.9
Unallocated	$	(3.3)	$	(3.1)	$	(4.2) Werbung Mehr Nachrichten zur CANFOR PULP PRODUCTS INC. Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 10:33 - PR Newswire Norges Bank - Form 8.3 - BHP Group Limited 08:56 - PR Newswire Samson Rock Capital LLP - Form 8.3 - Accrol Group Holdings plc 08:55 - PR Newswire Samson Rock Capital LLP - Form 8.3 - Wincanton Plc SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59