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Conifex Timber expects lumber markets to continue to experience volatility through 2023 as global market conditions continue to evolve. The effect of inflationary pressures and higher interest rates affecting consumer spending in the housing and repairs and remodeling markets will result in weaker lumber market prices than seen in recent years. While US builder confidence has seen an uptick in recent weeks, lagging US housing completions and tempered repair and remodeling activity affect market demand for lumber products.<\/p>\n
At its Mackenzie sawmill, Conifex expects to see an increase in lumber production over 2022, with the expectation of achieving annualized operating rates of approximately 85% in 2023 on improved sawmill operating rates. Conifex anticipates an improvement in operating costs in 2023 as a result of decreased unit fixed costs on higher lumber production volumes and availability of sufficient logs for continuous operations at the company's sawmill. Conifex is optimistic that it will realize a higher volume of lumber shipments in 2023 as transportation issues are not anticipated to be as severe or persist as long as the challenges faced in 2022.<\/p>\n
During the fourth quarter of 2022, Conifex incurred a net loss from continuing operations of $0.2 million or nil per share compared to net income of $0.9 million or $0.02 per share in the previous quarter and net loss of $2.5 million or $0.06 per share in the fourth quarter of 2021. The net loss in the fourth quarter was primarily the result of lower lumber production and shipment volumes.<\/p>\n
Lumber Operations<\/span><\/p>\n North American lumber market prices continued their decline in the fourth quarter of 2022. Canadian dollar-denominated benchmark WSPF prices, which averaged $546 in the fourth quarter, decreased by 26% or $196 from the previous quarter and by 41% or $385 from the fourth quarter of 2021.4\u00a0The market price slide was fueled by the reduction in new home construction activity in the US, elevated offshore lumber import levels to US markets, and inflationary pressures negatively impacting repair and remodeling activities. US housing starts on a seasonally adjusted annual basis averaged 1,368,000 in the fourth quarter of 2022, down 6% from the previous quarter and 19% from the fourth quarter of 2021.5<\/p>\n Conifex produced 27.9 million board feet of lumber in the fourth quarter of 2022, representing approximately 47% of annualized capacity. Lumber production was affected by a two-week curtailment of our Mackenzie sawmill in the period and overall depressed operating rates. In the previous quarter, lumber production totaled 39.5 million board feet on a reduced production schedule to one-shift over 6 weeks beginning in August 2022. Lumber production of 44.0 million board feet or approximately 73% of operating capacity in the fourth quarter of 2021 was impacted by COVID-19 shift reductions and severe winter weather in December 2021.<\/p>","protected":false},"excerpt":{"rendered":" Conifex Timber expects lumber markets to continue to experience volatility through 2023 as global market conditions continue to evolve. The effect of inflationary pressures and higher interest rates affecting consumer spending in the housing and repairs and remodeling markets will … Continue reading