Vancouver, BC, CANADA, Feb 7, 2012 â€“ Canfor Pulp Products Inc. (CPPI) (TSX: CFX) today announced its fourth quarter and full year 2011 results as well as the results of Canfor Pulp Limited Partnership (the Partnership) in which CPPI has a 49.8% ownership.
For the quarter, CPPI reported net income of $5.9 million or $0.17 per share, representing CPPIâ€™s share of the Partnershipâ€™s income less an income tax provision of $1.9 million.
For the quarter, the Partnership reported sales of $212.7 million and net income of $15.8 million or $0.22 per unit. The Partnership generated EBITDA of $37.8 million. Results were impacted by lower market pulp prices and the extended outage at the Northwood Pulp Mill. Capital expenditures of $28.8 million or $0.40 per unit incurred in the quarter, reduced distributable cash to negative $3.0 million or $0.04 per unit.
For the year, the Partnership reported sales of $941.0 million and generated net income of $138.6 million, EBITDA of $218.2 million and distributable cash of $131.6 million, or $1.85 per unit. CPPI reported net income of $72.6 million or $2.05 per share and declared dividends of $1.45 per share for 2011, including the dividend relating to the fourth quarter of $0.25 per share declared in February 2012.
Capital expenditures for the year were $139 million, of which $56 million was funded by the Partnership, and the remainder from government programs. The largest government funding source was the Canadian Pulp and Paper Green Transformation Program. The Partnership was allocated a total of $122.2 million and received approval to proceed with four projects under the Program. Three projects were completed in 2011 including the Northwood recovery boiler upgrade. The final project, which is partially funded by the Program, is to upgrade the feed water system at the Prince George Pulp and Paper Mill and is projected to be completed in the third quarter of 2012.
Global softwood pulp markets softened through the fourth quarter as world pulp producer inventories increased to 36 days of supply. NBSK pulp list prices decreased US$80 per tonne for North America to US$890 and US$125 per tonne for Europe to US$825. The Partnershipâ€™s NBSK pulp list price for China decreased US$150 per tonne to US$690.
The global softwood pulp market is projected to remain soft through the first quarter of 2012. There is ample supply as historically there is minimal scheduled maintenance downtime at pulp mills during the winter months. However, current pricing at or below cash costs of some NBSK producers may reduce the risk of further price erosion. There are no maintenance outages scheduled at the Partnershipâ€™s operations in the first quarter of 2012.
CPPI announced a quarterly dividend of $0.25 per share to be paid on February 23, 2012 to shareholders of record at the close of business on February 16, 2012.
A conference call to discuss the fourth quarter 2011 financial and operating results will be held on Tuesday, February 7, 2012 at 8:00 a.m. Pacific time.
To participate in the call, please dial 416-340-8018 or Toll-Free 1-877-223-7781. For instant replay access, please dial 905-694-9451 or Toll-Free 1-800-408-3053 and enter participant pass code 2774354. The conference call will be webcast live and will be available at www.canforpulp.com/investors/webcasts.asp.
This news release is available on the Partnershipâ€™s website at www.canforpulp.com.
About Canfor Pulp Products Inc.
Canfor Pulp Products Inc. (CPPI) is the successor to the Canfor Pulp Income Fund (the Fund) following the completion of the conversion of the Fund from an income trust structure to a corporate structure by court approved plan of arrangement under the Business Corporations Act (British Columbia) (the BCBCA) on January 1, 2011 (the Conversion). The Conversion involved the exchange, on a one-for-one basis, of all outstanding Fund Units for common shares of CPPI (CPPI Shares). Upon completion of the Conversion, on January 1, 2011, the unit holders of the Fund became the sole shareholders of CPPI which became sole owner of all of the outstanding Fund Units.
Immediately following the conversion, the Fund was wound up, CPPI received all of the assets and assumed all of the liabilities of the Fund and CPPI became the direct holder of the 49.8% interest in the Partnership previously held by the Fund.
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