Conifex Timber Inc. reported results for the second quarter ended June 30, 2019.
The company incurred net loss of $9.1 million or $0.19 per share in Q2, 2019. This compares with net income of $9.2 million or $0.35 per share in the second quarter of 2018. The revenues totaled $95.7 million, significantly lower by 31%, in comparison with the corresponding quarter last year. Conifex recorded operating loss of $19.1 million in the lumber segment. The segment operating results are inclusive of CV and AD duties expense of $2.5 million in Q2 this year. It must be noted that the company had expensed out $3.8 million in Q1 ’19 and $8.2 million in Q2 ’18 towards duties.
The lumber segment operating results were impacted by lower operating rates at its Fort St. James sawmill, El Dorado and Glenwood, Arkansas mills in the first half of 2019 and Mackenzie, BC mill in Q2 this year. The annualized run rate of Southern Yellow Pine (SYP) lumber by the U.S. mills recorded sharp decline from 418 million board feet in Q1 to 348 million board feet in Q2.
The shipments of Conifex produced lumber totaled approximately 149 million board feet, down by 5% from Q2 2018. Revenues from Conifex produced lumber represented a decline of 31% from second quarter 2018 to total $73.6 million. The unit log costs at its B.C. mills increased by over 19% from the corresponding quarter last year.
The company expects further reduction in lumber shipments. Also, lumber prices are expected to increase gradually through the remainder of 2019 and 2020.