VANCOUVER — Forestry firm Canfor Corp. is warning that the impact of the COVID-19 pandemic will "weigh heavily" on its financial performance this year as it reports a net loss of $70 million in the first quarter.
The loss on sales of $1.17 billion in the first three months of 2020 compared with a loss of $86.6 million on sales of $1.15 billion in the same period in 2019.
The Vancouver-based company reported a first-quarter operating loss of $89 million, including a $63-million inventory writedown on its lumber business (offset by a $10.7 million recovery in pulp and paper), compared with a loss of $64.3 million a year earlier.
In response to the pandemic, Canfor announced in late March and early April it would reduce output from most of its B.C. sawmills, as well as a three-week curtailment of Canfor Pulp Products Inc.'s Northwood pulp mill.
It also announced a reduction of its capital spending budget by $20 million for its lumber segment and $15 million for pulp and paper, resulting in a total decrease of about $100 million compared with 2019.
Canfor says it expects volatile lumber market conditions throughout the world this year, adding U.S home construction activity will likely remain at depressed levels.
"While we saw a modest improvement in our results at our lumber and pulp and paper operations in the first quarter, these results were significantly overshadowed by the virus outbreak and the extreme market volatility and major economic turmoil it has caused," said CEO Don Kayne in a news release.
This report by The Canadian Press was first published April 23, 2020.
Companies in this story: (TSX:CFP)
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