Consolidated net sales of $256.2 million in the third quarter of 2018 increased 5 percent compared with $245.1 million in the third quarter of 2017. Incremental revenues resulted from higher Technical Products volumes (including volumes from the November 2017 Coldenhove Acquisition), increased selling prices in both segments and a higher value mix in Technical Products. These items more than offset lower Fine Paper and Packaging volumes and a lower value mix. Operating income of $16.5 million in the third quarter of 2018 compared to operating income of $29.0 million in 2017. After excluding a net $0.7 million of costs in 2018 and a net gain of $2.3 million in 2017, adjusted operating income decreased $9.5 million. The decrease was due to approximately $15 million of higher manufacturing costs, comprised of $9 million of higher input costs, and $6 million of increased costs reflecting operational inefficiencies and spending mostly related to incremental downtime for maintenance work and to manage global inventories. These increased costs were only partly offset by higher selling prices, volume growth and a higher value sales mix. Click read more below for additional detail.
Canfor Corporation (TSX: CFP) today reported net income attributable to shareholders (“shareholder net income”) of $50.9 million, or $0.38 per share, for the third quarter of 2016, compared to shareholder net income of $36.0 million, or $0.27 per share, for the second quarter of 2016 and a net loss attributable to shareholders of $17.3 million, or $0.13 per share, for the third quarter of 2015. For the nine months ended September 30, 2016, the Company’s shareholder net income was $112.9 million, or $0.85 per share, compared to $23.1 million, or $0.17 per share, for the nine months ended September 30, 2015.
The Company’s adjusted shareholder net income for the third quarter of 2016 was $51.7 million, or $0.39 per share,compared to an adjusted shareholder net income of $26.5 million, or $0.20 per share, for the second quarter of 2016, and an adjusted shareholder net income of $6.4 million, or $0.05 per share for the third quarter of 2015. For the nine months ended September 30, 2016, the Company’s adjusted shareholder net income was $99.1 million, or $0.75 per share, compared to $50.9 million, or $0.38 per share, for the nine months ended September 30, 2015.
The Company reported operating income of $97.4 million for the third quarter of 2016, up $43.3 million from
adjusted operating income of $54.1 million for the second quarter of 2016. Adjusted operating income in the second quarter of 2016 excluded a one-time pre-tax gain of $15.5 million related to the settlement of a legal claim with respect to logistics services for the Company’s pellet business. Higher earnings in the third quarter of 2016 reflected improved lumber segment results driven largely by higher Western Spruce Pine/Fir (“SPF”) and Southern Yellow Pine (“SYP”) unit sales realizations and solid productivity gains in the US South, offset in part by higher market based stumpage and increased log hauling costs in Western Canada. Pulp and paper segment results primarily reflected significantly less scheduled maintenance downtime at the Company’s Northern Bleached Softwood Kraft (“NBSK”) pulp mills in the current quarter. Also contributing to the third quarter results were higher pulp shipment volumes, increased energy revenues as well as an improvement in pulp and paper unit sales realizations.