Canfor Pulp reports results for the second quarter of 2025.

Executive Summary

• Canfor Pulp Products Inc. reported a second quarter 2025 net loss of $7 million ($0.10 per share), driven by weakened global pulp market fundamentals, trade uncertainties, and a strengthening Canadian dollar.
• The company recorded an operating loss of $5.3 million, which included a $2.9 million inventory write-down; adjusted operating loss was $2.4 million.
• Global NBSK pulp prices declined significantly due to weak demand from China, with list prices averaging US$734/tonne, down 7% from the prior quarter, while producer inventories rose to 46 days of supply.

Key Details

• Financial Performance (Q2 2025):
  • Sales: $177.9 million CAD (down from $196.2 million in Q1 2025 and $220.0 million in Q2 2024).
  • Reported Operating Loss: $5.3 million (vs. $10.8 million income in Q1 2025).
  • Adjusted Operating Loss: $2.4 million (after adding back $2.9 million inventory write-down).
  • Net Loss: $6.7 million ($0.10 per share basic and diluted).
  • Adjusted Operating Income Before Amortization: $6.4 million.
• Operational Metrics:
  • Pulp Production: 102,000 tonnes (down 2% or 2,000 tonnes from Q1 2025 due to minor operational disruptions).
  • Paper Segment Operating Income: $1.5 million (down from $5.4 million in Q1 2025).
• Market Conditions & Pricing:
  • US-dollar NBSK list prices to China averaged US$734/tonne, a decrease of US$59/tonne (7%) from the previous quarter.
  • Prices started the quarter at US$798/tonne and ended June at US$690/tonne.
  • Global softwood pulp producer inventories climbed to 46 days of supply by May 2025 (up 8 days from March 2025), well above the balanced range of 32-43 days.
  • Canadian dollar strengthened by 3 cents (4%) quarter-over-quarter, negatively impacting sales unit realizations.
• Outlook & Guidance:
  • Market conditions expected to remain weak in Q3 2025 due to soft purchasing activity from China and general economic uncertainty.
  • A minor scheduled maintenance outage in Q3 2025 is projected to reduce NBSK market pulp production and paper production by 2,000 tonnes each.
  • Company has mitigation strategies in place for potential tariffs on US pulp and paper shipments.
• Conference Call:
  • Held on August 1, 2025, at 9:00 AM Pacific time.

Notable Quotes

• "Our results for the second quarter of 2025 were strongly influenced by persistent global economic uncertainty, significantly impacting global pulp and paper market fundamentals. We anticipate these market pressures to continue throughout the third quarter. We are closely monitoring these external factors but continue to remain focused on optimizing areas within our control, including improving safety, reliability, productivity and cost structure." — Stephen Mackie, President and CEO