February 22, 2008 / 11:21 PM / in 10 years

Canfor posts loss amid weak U.S. housing market

VANCOUVER, British Columbia (Reuters) - Lumber producer Canfor Corp (CFP.TO) posted a fourth-quarter loss on Friday, pounded by the weak U.S. housing construction market, a strong Canadian dollar and an asset impairment charge.

North America’s third largest softwood producer said lumber and panel sales into the United States remain weak in the first quarter and it does not see U.S. housing starts improving until at least the second half of the year.

Canfor said it lost C$237 million, or C$1.66 a share, in the last three months of 2007 on sales of C$711 million. It took a C$189 million impairment charge on mill cutbacks and closures and recorded C$14 million in severance.

Its operating loss in the period was C$124.7 million.

That compared with a profit of C$471.8 million, or C$3.31 a share, a year earlier, when its results were boosted by a one-time gain from duties repaid under the settlement of the U.S.-Canada softwood lumber trade fight.

Lumber sales in the quarter were C$395.3 million, down from C$555.7 million in the fourth quarter of 2006. Panel sales were C$70.5 million, down from C$82.3 million. Pulp and paper sales were C$245 million, down from C$254 million.

Canfor said pulp prices remained strong and, while demand saw a seasonal drop this winter, it expects it to surge in the spring because of the U.S. presidential election and the Summer Olympics in China.

The few bright spots in the lumber market were in Canada, where demand remained strong, and overseas, with Canfor’s shipments increasing 16 percent from a year earlier.

Reporting Allan Dowd, Editing by Rob Wilson

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