Canfor reports results for the third quarter of 2025

VANCOUVER, BC, Nov. 5, 2025 /CNW/ - Canfor Corporation ("the Company" or "Canfor") (TSX: CFP) today reported its third quarter of 2025 results:

Overview.

• For the third quarter of 2025, the Company reported an operating loss of $208 million and a net loss of $172 million, equivalent to $1.48 per share.
• After taking into consideration adjusting and one-time items¹ of $97 million, the adjusted operating loss for Q3 2025 was $111 million, compared to a similarly adjusted operating loss of $44 million in Q2 2025.
• Sustained pressure on global lumber market conditions and pricing through most of the third quarter, drove a quarter-over-quarter decline in results across all lumber operating regions.
• Vida AB completed acquisition of AB Karl Hedin Sågverk and its 3 sawmills.
• Global pulp market fundamentals remained at depressed levels throughout the third quarter; markets in China were persistently weak, while North American markets softened, adjusting to the lower pricing environment in other regions.

Financial results.

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

(millions of Canadian dollars, except per share amounts)		Q3 2025		Q2 2025		YTD 2025		Q3 2024		YTD 2024
Sales		$	1,259.8	$	1,379.4	$	4,056.7	$	1,202.9	$	3,967.1
Reported operating income (loss) before amortization, asset write-downs and impairments		$	(110.7)	$	39.6	$	1.5	$	(144.4)	$	(222.9)
Reported operating loss		$	(208.3)	$	(251.4)	$	(488.2)	$	(559.7)	$	(896.3)
Net loss^2		$	(172.4)	$	(202.8)	$	(406.2)	$	(350.1)	$	(605.7)
Net loss per share, basic and diluted^2		$	(1.48)	$	(1.71)	$	(3.45)	$	(2.96)	$	(5.11)
^1. Adjusted operating income (loss) as well as adjusting and one-time items referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the table on page 2 of the news release and the "Non-IFRS financial measures" section of the news release. ^2. Attributable to equity shareholders of the Company.

The Company reported an operating loss of $208.3 million for the third quarter of 2025, compared to an operating loss of $251.4 million in the second quarter of 2025.

Commenting on the Company's third quarter results, Canfor's President and Chief Executive Officer, Susan Yurkovich, stated: "The ongoing global economic and trade uncertainty, in conjunction with punitive US softwood lumber duties, led to persistently weak market conditions and subdued demand across all of our operating regions during the third quarter of 2025. We remain focused on the areas within our control--ensuring safe and efficient operations, maintaining disciplined cost management and delivering quality products to our customers. We are well positioned to leverage our globally diversified operating platform when market conditions improve."

Yurkovich added, "Global economic uncertainty is also adversely affecting pulp and paper market fundamentals and pricing, resulting in another challenging quarter for our pulp business. While our ongoing efforts to enhance reliability and productivity have partially mitigated these pressures, we expect these economic challenges to persist."

Third quarter adjusting and one-time items.

After accounting for adjusting and one-time items totaling $97.0 million--which included an inventory write-down charge and a duty expense associated with the finalization of countervailing ("CVD") and anti-dumping duty ("ADD") rates applicable to the sixth period of review ("POR6")--the Company's adjusted operating loss was $111.3 million for the current quarter. This compared to a similarly adjusted operating loss of $44.0 million in the prior quarter. These results reflect a decline in results for both the lumber and pulp and paper segments.

(millions of Canadian dollars)			Q3 2025		Q2 2025		YTD 2025		Q3 2024		YTD 2024
Reported operating loss			$	(208.3)	$	(251.4)	$	(488.2)	$	(559.7)	$	(896.3)
Asset write-down and impairment – lumber segment			$	-	$	188.6	$	188.6	$	100.3	$	131.9
Asset write-down and impairment – pulp segment			$	-	$	-	$	-	$	211.0	$	211.0
Inventory write-down (recovery), net^4			$	19.8	$	12.1	$	28.2	$	(14.8)	$	6.4
Adjusted operating loss^3			$	(188.5)	$	(50.7)	$	(271.4)	$	(263.2)	$	(547.0)
One-time items – lumber segment^3:
Restructuring and closure costs^5			$	-	$	6.7	$	6.7	$	36.5	$	69.1
Gain on sale of assets, net^6			$	-	$	-	$	-	$	(34.9)	$	(34.9)
Duty expense related to finalized rates, net^7			$	77.2	$	-	$	77.2	$	67.2	$	67.2
Duty expense related to fair value measurement^8			$	-	$	-	$	-	$	53.4	$	53.4
One-time items – corporate restructuring costs^3,5			$	-	$	-	$	-	$	2.1	$	2.1
Adjusted operating loss before one-time items^3			$	(111.3)	$	(44.0)	$	(187.5)	$	(138.9)	$	(390.1)
Amortization			$	97.6	$	102.4	$	301.1	$	104.0	$	330.5
Adjusted operating income (loss) before amortization and one-time items^3			$	(13.7)	$	58.4	$	113.6	$	(34.9)	$	(59.6)
^3. Adjusted operating income (loss) as well as adjusting and one-time items referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the "Non-IFRS financial measures" section of this news release.
^4. For the lumber segment, a $14.9 million net inventory write-down expense was recorded in Q3 2025 (Q2 2025 – $9.2 million net inventory write-down expense, Q3 2024 – $14.8 million net reversal of a previously recognized inventory write-down). For the pulp and paper segment, a $4.9 million net inventory write-down expense was recorded in Q3 2025 (Q2 2025 – $2.9 million net inventory write-down expense, Q3 2024 – no inventory valuation adjustment was recognized).
^5. No restructuring and closure costs were recognized in Q3 2025 (Q2 2025 – restructuring and closure costs of $6.7 million related to Darlington and Estill; Q3 2024 – restructuring and closure costs of $36.5 million in the lumber segment and $2.1 million in the unallocated segment, largely related to the permanent closures of Plateau and Fort St. John).
^6. In Q3 2024, the Company completed the sale of its remaining Mackenzie sawmill assets and associated forest tenure to the McLeod Lake Indian Band and Tsay Keh Dene Nation for total proceeds of $66.5 million. As a result of this transaction, a net gain on sale of $34.9 million was recognized in Q3 2024.
^7. A net duty expense of $77.2 million (US$56.2 million) was recognized in Q3 2025 following the finalization of CVD and ADD rates applicable to POR6 (Q3 2024 – a net duty expense of $67.2 million (US$48.6 million) related to final rates for the fifth period of review ("POR5")).
^8. In Q3 2024, the Company refined its estimate of the fair value measurement of net duty deposits recoverable. In accordance with IFRS Accounting Standards, this change in accounting estimate was applied on a prospective basis.

Third quarter lumber segment highlights.

For the lumber segment, the operating loss was $182.2 million for the third quarter of 2025, compared to the previous quarter's operating loss of $229.2 million. After taking account of adjustments and one-time items totaling $92.1 million for the lumber segment in the current period, as noted in the aforementioned table, the lumber segment's adjusted operating loss was $90.1 million, compared to a similarly adjusted operating loss of $24.7 million in the prior quarter.

These results reflect persistently weak lumber market conditions and pricing across all of the Company's operating regions, most notably in the US South. These conditions were accompanied by lower lumber production and shipment volumes, largely driven by the regular summer downtime in Europe, combined with the impact of higher duties in Western Canada and, to a lesser extent, a full quarter impact of the June 2025 closures of the Darlington and Estill sawmills in the US South.

North American housing markets remained under pressure through the third quarter, as persistent affordability challenges, combined with political and economic uncertainty, as well as the implementation of increased US duties in August, continued to dampen demand. These factors contributed to sustained downward pressure on most North American benchmark lumber prices compared to the previous quarter. The repair and remodeling sector, however, remained steady throughout the period.

Offshore lumber markets in Asia experienced significant challenges during the quarter, as ongoing trade uncertainty resulted in supply chain disruptions and adversely affected demand. In Japan, lumber prices softened in the third quarter, reflecting reduced consumption levels as the region addressed a backlog of construction activity from previous periods. In contrast, China saw a modest uptick in pricing; however, the broader economy and, in particular, the real estate sector, remained under significant pressure, despite ongoing government stimulus efforts, limiting any meaningful or sustained recovery in lumber demand.

European lumber demand also faced downward pressure throughout the third quarter of 2025, driven by ongoing political and economic uncertainty across the region. While parts of Central and Northern Europe showed modest signs of improvement, market conditions in Sweden remained challenged, primarily due to elevated log costs. In the United Kingdom, increased pine supply, redirected from the Middle East and North Africa region, combined with soft demand, exerted further pricing pressure in the region.

Lumber segment outlook.

Looking ahead, North American lumber markets are anticipated to remain weak through the balance of 2025. Ongoing market uncertainty, affordability challenges, constrained consumer confidence, and the additional Section 232 tariffs coming into effect early in the fourth quarter of 2025, are projected to continue to exert pressure on near-term demand. On the supply side, however, the gradual effects of industry-wide sawmill curtailments and closures are forecast to drive some modest price improvement over the remainder of the year.

In addition to the CVD and ADD impacts on the Company, Canfor continues to monitor the trade situation between Canada and the US. With a diversified global operating platform, the Company is well positioned to mitigate some of these costs, however, the tariffs present challenges for the Company's Canadian operations. The Company will continue to monitor market dynamics and allocate product volumes accordingly. 

Offshore lumber markets are projected to see slight downward pressure through the fourth quarter of 2025. 

In Europe, lumber pricing is anticipated to see a modest supply-driven pricing improvement through the fourth quarter of 2025. While overall demand across the region is projected to remain relatively stable, reduced supply, resulting from the benefits of curtailments within the region, is forecast to place upward pressure on pricing in the near-term.

Third quarter pulp and paper segment highlights.

For the pulp and paper segment, the operating loss was $16.0 million for the third quarter of 2025, compared to an operating loss of $5.3 million for the second quarter of 2025. After adjusting for a $4.9 million inventory write-down in the current period, Canfor Pulp Product Inc.'s ("CPPI") adjusted operating loss was $11.1 million for the third quarter of 2025. These results largely reflect the ongoing impact of global pulp pricing declines in the current quarter driven by elevated market pulp producer inventory levels and weak softwood pulp demand. These factors were moderated to a degree by improved pulp production at both of CPPI's pulp mills and the associated benefit of lower per-unit pulp manufacturing costs.

After experiencing downward pressure in the second quarter of 2025, global softwood pulp markets remained notably weak during the current period. Northern Bleached Softwood Kraft ("NBSK") pulp prices in China continued to decline throughout the third quarter. North American pulp markets also came under pressure as prices in this region adjusted to the lower pricing environment previously experienced in other global regions. As a result, US-dollar NBSK list prices to China, the world's largest pulp consumer, averaged US$690 per tonne for the current quarter, down US$44 per tonne, or 6%, from the prior quarter.

Global softwood pulp producer inventories continued to increase through the third quarter of 2025, ending August at 52 days of supply, an increase of 2 days compared to June 2025, remaining well above the balanced range. Market conditions are generally considered balanced when inventories are in the 39-47 days of supply range.

Pulp outlook.

Looking ahead, global softwood kraft pulp market conditions are anticipated to remain weak during the fourth quarter of 2025 as economic uncertainty, particularly between China and the United States, continues. As a result, pulp producer inventories are forecast to remain well above the balanced range through the remainder of 2025.

In addition, in the fourth quarter of 2025, a maintenance outage is scheduled at CPPI's Northwood NBSK pulp mill which is projected to reduce NBSK market pulp production by 10,000 tonnes.

Consequently, Management's forecast indicates that a decline in CPPI's results in the fourth quarter, correlated in part with the reduced production associated with the scheduled maintenance outage, combined with ongoing macroeconomic headwinds, could leave CPPI with minimal headroom under its financial covenants and create a risk of non-compliance as early as December 31, 2025.

Management is working to mitigate this risk of non-compliance by implementing cost-saving measures and deferring certain capital expenditures to improve CPPI's financial position. However, CPPI's ability to maintain covenant compliance and execute these plans is subject to a number of uncertainties including market volatility, execution risk and the achievement of forecast cash flows. Management is actively negotiating with its lenders in an effort to obtain a waiver for the potential future breach of its financial covenants.

Paper outlook.

The subdued demand for bleached kraft paper globally and in North America, as seen throughout the first three quarters of 2025, is anticipated to continue into the fourth quarter of 2025, primarily due to ongoing uncertainties surrounding Canada-US trade relations, in addition to broader global economic challenges.

Additional information and conference call.

A conference call to discuss the third quarter's financial and operating results will be held on Thursday, November 6, 2025, at 9:00 AM Pacific time. To participate in the call, please dial Toll-Free 1-888-510-2154. For instant replay access until Thursday, November 20, 2025, please dial Toll-Free 1-888-660-6345 and enter participant pass code 75985#.

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 www.canfor.com/investor-relations/webcasts. 

Non-IFRS financial measures.

Throughout this press release, reference is made to certain non-IFRS financial measures which are used to evaluate the Company's performance but are not generally accepted under IFRS and may not be directly comparable with similarly titled measures used by other companies.

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 Canfor assumes no obligation to update such information to reflect later events or developments, except as required by law.

About Canfor Corporation.

Canfor is a global leader in the manufacturing of high-value low-carbon forest products including dimension and specialty lumber, engineered wood products, pulp and paper, wood pellets and green energy. Proudly headquartered in Vancouver, British Columbia, Canfor produces renewable products from sustainably managed forests, at more than 50 facilities across its diversified operating platform in Canada, the United States and Europe. The Company has a 77% stake in Vida AB, Sweden's largest privately owned sawmill company and also owns a 54.8% interest in Canfor Pulp Products Inc. Canfor shares are traded on The Toronto Stock Exchange under the symbol CFP. For more information visit canfor.com.

SOURCE Canfor Corporation

Media contact: Mina Laudan, VP, Corporate Affairs, [phone], [email protected]; Investor contacts: Pat Elliott, CFO and Corporate Secretary, [phone], [email protected]; Dan Barwin, Head, Corporate Development, [phone], [email protected]