A five-fold increase in the adjusted operating income within just one quarter (from CAD 58 million in Q2 to CAD 347 million in Q3) is already remarkable. The comparison with the first quarter is even more extraordinary: At the time, Canfor’s operating income was CAD 9 million and thus saw a 38-fold increase since then.
In the third quarter, home construction activity remained strong in the US, particularly for the single-family housing market. US housing starts were up by 33% compared to the previous quarter, reaching 1,430,000 units. This was the main driver for Canfor, while the group profited from the strength in the repair and remodeling sector to a lesser extent.
Canfor also has a European subsidiary, i.e. Vida in Sweden. Lumber demand in Western Europe and Scandinavia continued to grow in the third quarter (DIY, repair/remodeling). Since most business in Europe was conducted based on quarterly contracts negotiated in advance, prices did not soar. However, Canfor expects prices in Europe to show “solid increases” in the fourth quarter.
In the third quarter, Canfor sold 1.37 billion bft (2.2 million m³; net size on the basis of 2-by-4), i.e. 19% more than in the previous quarter. The SPF 2x4 #2&Btr price gained considerably at the end of the second quarter and continued its upward trend in the third quarter, reaching an all-time high of 955 USD/1000 bft at the end of September. In the third quarter, the Western SPF 2x4 #2&Btr price was 768 USD/1000 bft, up by 411 USD/1000 bft or 115% compared to the previous quarter.
