Vancouver, Canada – March 5, 2026--Canfor Pulp Products Inc. reported a significant operating loss in the fourth quarter of 2025, reflecting continued weakness in global pulp markets, lower pulp prices, and operational challenges.

The company reported an operating loss of $85.6 million in Q4 2025, compared with an operating loss of $16.0 million in Q3 2025. After adjusting for one-time items totaling $57.5 million, the adjusted operating loss stood at $28.1 million, compared with $11.1 million in the previous quarter.

Key Financial Highlights

• Operating Loss: $85.6 million (Q4 2025) vs $16.0 million (Q3 2025)

• Adjusted Operating Loss: $28.1 million vs $11.1 million in Q3

• Pulp Production: 103,000 tonnes in Q4, down 4% sequentially

• China NBSK pulp price: averaged $671/tonne, down $19/tonne (3%) QoQ

• North America NBSK pulp price: declined 8% QoQ

• Global pulp inventories: remained elevated at 47 days of supply

Weak demand across global markets and higher producer inventories continued to pressure prices during the quarter.

Production and Operations Update

• Pulp production totaled 103,000 tonnes in Q4 2025.

• Output declined due to scheduled maintenance downtime at the Northwood pulp mill and delays during the restart after maintenance.

• These factors reduced production by approximately 15,000 tonnes during the quarter.

The company successfully completed the maintenance outage, but operational difficulties during restart affected production volumes.

Market Conditions

Global pulp markets remained weak throughout the quarter.

Key trends include:

• Persistent high global pulp inventories

• Continued weak demand in several regions

• Real estate slowdown in China affecting demand

• Declining pulp prices globally

Toward the end of the quarter, buyer sentiment improved slightly as lower prices encouraged purchasing activity, particularly in China.

Financial Position and Covenant Update

Due to expected covenant breaches:

• The company renegotiated its operating loan facility in December 2025.

• Lenders granted temporary covenant relief for Q4 2025.

• A minimum liquidity requirement of $10 million was introduced.

• The operating credit facility was effectively reduced from $160 million to $150 million during this relief period.

At the end of 2025:

• Net debt to capitalization: 116.1%

• EBITDA interest coverage ratio: (0.1)x

Maintenance Shutdown Plan

• No major maintenance outages planned in Q1 2026.

• A scheduled maintenance outage is planned at the Intercontinental NBSK pulp mill (Intercon) in Q2 2026.

• The outage is expected to reduce production by approximately 20,000 tonnes of NBSK market pulp.

No additional major downtime is currently planned for the remainder of 2026.

Strategic / Corporate Update

The company is pursuing a proposed transaction with Canfor Corporation, which could impact its financial restructuring and covenant negotiations. Discussions with lenders regarding additional covenant relief are currently paused pending the outcome of the transaction.

Outlook

Canfor Pulp expects global pulp market conditions to remain weak into 2026, driven by:

• Global economic uncertainty

• Continued high pulp inventories

• Ongoing demand weakness in major markets

Despite these challenges, the company is implementing mitigation strategies to manage potential impacts from tariffs and market volatility.