Canfor Corporation Reports Third Quarter 2026 Financial Results Amid Challenging Market Conditions

Canfor Corporation (TSX: CFP), a global manufacturer of forest products, today announced its financial and operating results for the third quarter ended September 30, 2026.

The Company reported consolidated sales of C$1.285 billion and an adjusted EBITDA of C$98.1 million for the third quarter of 2026, compared with C$1.526 billion and C$119.6 million, respectively, in the second quarter of 2026.

Canfor recorded a reported operating loss of C$76.6 million and a shareholder net loss of C$88.2 million, equivalent to a loss of C$0.75 per share.

The results reflected relatively stable performance in the lumber segment, improved earnings in the pulp and paper segment, and continued uncertainty across global forest product markets.

Financial Highlights

For the third quarter of 2026, Canfor reported:

• Sales revenue of C$1,284.8 million.

• Adjusted EBITDA of C$98.1 million.

• Reported operating loss of C$76.6 million.

• Adjusted operating loss of C$43.8 million.

• Shareholder net loss of C$88.2 million.

• Basic and diluted loss per share of C$0.75.

Adjusted EBITDA included adjustments and one-time items totalling C$74.1 million, primarily related to asset impairments, inventory adjustments and restructuring costs.

For the first nine months of 2026, the Company recorded sales of C$4,170.3 million and adjusted EBITDA of C$226.2 million.

Lumber Segment Performance

The lumber segment generated sales of C$1,141.9 million and adjusted EBITDA of C$107.9 million during the third quarter, compared with C$144.7 million in the previous quarter.

The segment experienced relatively stable earnings across its operating regions. However, lower European shipment volumes, largely associated with seasonal summer production downtime, contributed to the quarter-over-quarter decline.

Higher shipment volumes in the US South and improved lumber sales realizations across operating regions partially offset these challenges.

North American lumber markets remained affected by elevated mortgage rates, economic uncertainty and cautious customer purchasing behaviour. Benchmark lumber prices experienced modest declines during the quarter.

European markets showed slight improvement, particularly in Northern Europe, while demand in China remained weak due to continued challenges in residential construction.

Pulp and Paper Segment Performance

The pulp and paper segment reported sales of C$142.9 million and an adjusted EBITDA of C$1.5 million, improving from an adjusted EBITDA loss of C$12.2 million in the second quarter.

The improvement was primarily supported by higher production following scheduled maintenance downtime in the previous quarter.

The paper business continued to deliver strong results, generating EBITDA of C$10.5 million, compared with C$8.0 million in the previous quarter.

However, global softwood pulp markets remained subdued due to soft demand, increased production capacity and elevated producer inventories. Northern Bleached Softwood Kraft (NBSK) pulp prices to China averaged US$645 per tonne, representing a 2% decline from the previous quarter.

Strategic Developments and Operational Changes

During the third quarter, Canfor completed its acquisition of PinkWood Ltd., expanding its engineered wood products capacity and strengthening its presence in the I-joist market.

The Company also proceeded with two significant operational restructuring decisions:

• Fox Creek Sawmill, Alberta: The permanent closure was completed following the operational wind-down in September 2026.

• Northwood Pulp Mill, Prince George, British Columbia: The Company announced its permanent closure, with operations expected to cease by the end of 2026.

These decisions form part of Canfor's strategy to align its operating footprint with market conditions and improve long-term business competitiveness.

Cash Flow and Financial Position

Canfor generated C$94.7 million in cash from operating activities during the third quarter of 2026.

Capital additions during the quarter totalled C$68.7 million, while the Company invested C$47.0 million in the acquisition of PinkWood Ltd., net of cash acquired.

At September 30, 2026, Canfor reported total assets of approximately C$4.916 billion and total liabilities of approximately C$2.388 billion.

The Company continued to maintain access to operating loan facilities to support its financial and operational requirements.

Market Outlook

Looking ahead, Canfor expects market conditions to remain challenging through the fourth quarter of 2026.

North American lumber markets are expected to experience seasonal demand weakness, with elevated mortgage rates and affordability challenges continuing to influence purchasing activity.

In Asia, Japanese lumber demand may improve modestly, while Chinese demand is expected to remain subdued.

European lumber markets are projected to soften slightly, although Northern Europe and the Middle East and North Africa markets are expected to remain relatively stable.

Global softwood pulp market conditions are anticipated to remain difficult due to additional production capacity and subdued demand. In contrast, bleached kraft paper demand is expected to remain stable, supported by growth in paper-based packaging applications.

The fourth-quarter results will also reflect the planned closure of the Northwood pulp mill and its associated impact on production, shipments and operating costs.

Management Commentary

Susan Yurkovich, President and Chief Executive Officer of Canfor Corporation, highlighted the resilience of the Company's lumber operations and the improvement in pulp and paper performance despite ongoing market uncertainty.

Management emphasized that the Company's operational restructuring decisions are intended to adapt its manufacturing footprint to prevailing market conditions and strengthen its competitiveness over the long term.