Canfor Announces 2021 and Fourth Quarter of 2021 Results

• Record-high 2021 operating income before adjusting items of $2.2 billion; adjusted shareholder net income of $1.5 billion, or $12.16 per share
• Fourth quarter of 2021 adjusted operating income of $216 million; adjusted shareholder net income of $155 million or $1.24 per share
• 2021 includes impairment charges totaling $294 million or $1.47 per share, resulting in reported operating income of $1.9 billion for the year, net shareholder income of $1.3 billion or $10.74 per share; fourth quarter of 2021 operating loss of $67 million, net shareholder loss of $23 million or $0.19 per share
• Completed acquisition of Millar Western Forest Products Ltd.’s (“Millar Western”) solid wood operations and associated tenure located in Alberta, Canada, for $420 million, including an estimated $56 million in working capital, adding 630 million board feet to Canfor’s annual production capacity
• Announced sale of Mackenzie forest tenure and sawmill assets for combined proceeds of $70 million

2021 was a record-breaking year for Canfor, as unprecedented strength in global lumber markets in the first half of the year drove benchmark lumber prices to new record highs. This record pricing, coupled with higher production and shipment volumes in Europe and the US South substantially outweighed the impacts of extreme weather and higher log costs in British Columbia (“BC”), and operational challenges faced by the Company’s pulp business in the latter part of the year.

As a result, the Company reported an all-time high operating income of $1,908.1 million and net income per share of $10.74 for 2021, compared to the previous record-high operating earnings of $727.3 million and net income per share of $4.35 in 2020. After taking account of adjusting items, largely comprised of asset impairments, the Company’s operating income for 2021 was $2,188.7 million, with adjusted net income of $12.16 per share, almost triple the record earnings in the prior year.

For the fourth quarter of 2021, the Company reported an operating loss of $66.8 million. After taking account of adjusting items, the Company’s operating income was $216.3 million for the fourth quarter of 2021, down $114.4 million compared to an adjusted operating income of $330.7 million for the third quarter of 2021, principally reflecting a modest decline in lumber segment earnings combined with moderately lower pulp and paper segment earnings.
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