Canfor Pulp reports results for the fourth quarter of 2025

Executive Summary

• Canfor Pulp Products Inc. reported a Q4 2025 operating loss of C$85.6 M and a net loss of C$133.6 M ($2.05 per share).
• The quarter included a non‑cash asset write‑down and impairment charge of C$106.5 M (including a C$52.5 M deferred tax asset write‑off).
• Management reaffirmed that the Proposed Transaction – Canfor’s acquisition of all remaining CPPI shares for cash or stock – remains pending; covenant breach is highly probable by March 31 2026 if the deal does not close.

Key Details

• Financial Results (C$ millions)
• Sales: $140.2 (Q4 2025) vs. $164.6 (Q3 2025).
• Reported operating loss before amortization, write‑downs & impairment: $(20.1).
• Reported operating loss (including write‑downs): $(85.6).
• Net loss: $(133.6); net loss per share: $(2.05).
• Impairments – Total C$106.5 M charge comprised:
• Property, plant & equipment and inventory write‑down: C$54.0 M.
• Deferred tax asset write‑off: C$52.5 M.
• Adjusted Operating Loss – After removing one‑time items of C$57.5 M, adjusted loss was C$28.1 M (vs. C$11.1 M in Q3 2025).
• Production & Pricing
• Pulp production: 103,000 t (down 4% YoQ) – impacted by scheduled maintenance outage at Northwood and delayed restart (~15,000 t impact).
• US‑dollar NBSK pulp price to China averaged $671/t (down $19/t, ‑3% QoQ).
• Liquidity & Covenants
• Net debt/total capitalization: 116.1%.
• EBITDA interest coverage: –0.1×.
• Covenant Relief Period (Dec 31 2025) reduced operating loan facility to C$150 M with a $10 M minimum liquidity test.
• Proposed Transaction – Canfor to acquire remaining CPPI shares for cash ($0.50 per share) or stock (0.0425 Canfor share). Closing expected Q1 2026, subject to shareholder, court and regulatory approvals.
• Forward‑looking Outlook
• Management expects continued weak softwood pulp markets into 2026; high probability of covenant breach by March 31 2026 if transaction does not close.
• No major maintenance outages planned for Q1 2026; a scheduled outage at Intercontinental mill in Q2 2026 will reduce NBSK production by ~20,000 t.
• Conference Call – Scheduled for Friday, March 6 2026, 9:00 AM PT (replay until May 1 2026).

Notable Quotes

“The Company faced another extremely challenging quarter… we remain cautious heading into 2026 as we continue to navigate significant external pressures…” – Stephen Mackie, President & CEO.