Canfor Reports Results for Third Quarter of 2020

• Third quarter of 2020 reported operating income of $300 million, adjusted operating income of $347 million
• Record-high adjusted lumber earnings of $387 million, driven by unprecedented surge in lumber prices and strong operational performance across all regions despite the impact of the coronavirus pandemic
• Total net debt of $526 million at September 30, 2020, improvement of $331 million from prior quarter; available liquidity of $1.1 billion; net debt to capitalization of 18.6% at September 30, 2020
• Adjusted shareholder net income of $259 million, or $2.07 per share
• Vida Group (“Vida”) completed acquisition of Bergs Timber Production AB (“Bergs”) sawmill assets
• Cumulative cash deposits of $548 million on countervailing and anti-dumping duties at September 30, 2020

For the third quarter of 2020, the Company reported operating income of $299.6 million, up $202.7 million from the second quarter reported operating income of $96.9 million, reflecting a marked increase in lumber segment earnings, marginally offset by lower pulp and paper segment earnings.

After adjusting for countervailing (“CVD”) and anti-dumping duties (“ADD”) of $50.7 million in the lumber segment and an inventory write-down recovery of $3.0 million for the pulp and paper segment, the Company’s operating income was $347.3 million for the third quarter of 2020, up $289.2 million from similarly adjusted operating income of $58.1 million in the second quarter of 2020.

Results in the pulp and paper segment for the third quarter of 2020 reflected weak global pulp market conditions as well as significant fibre-related and previously deferred scheduled maintenance downtime, stemming from the ongoing impact of COVID-19, combined with a strong Canadian dollar. The significant effect of COVID-19 on lumber sawmill operating rates in the British Columbia (“BC”) Interior in the previous quarter materially impacted residual fibre supply to Canfor Pulp Products Inc.’s (“CPPI”) Prince George (“PG”) based operations heading into the current quarter, resulting in a four-week curtailment at CPPI’s Intercontinental Northern Bleached Softwood Kraft (“NBSK”) pulp mill and PG NBSK pulp and paper mill in July.
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