TORONTO, ON, March 14, 2024 - GreenFirst Forest Products Inc. (TSX: GFP) (“GreenFirst” or the “Company”) announced results for the fiscal year ended December 31, 2023.
The Company’s audited financial statements (“Financial Statements”) and related Management’s Discussion and Analysis (“MD&A”) for the fiscal year ended December 31, 2023 are available on GreenFirst’s website at www.greenfirst.ca and on SEDAR+ at www.sedarplus.ca.
Highlights
- Fourth quarter 2023 net loss from continuing operations was $21.6 million or $0.12 per share (diluted), compared to net earnings of $2.7 million or earnings of $0.01 per share (diluted) in the third quarter of 2023. For fiscal 2023, net loss from continuing operations was $48.8 million or $0.27 per share (diluted), compared to a net loss of $4.1 million or $0.02 per share (diluted) in 2022 on the same basis.
- Average lumber prices for Q4 2023 were lower than Q3 2023, with an average selling price of $611/mfbm compared to $642/mfbm in Q3 2023. There was strong pricing momentum in the first half of Q3 2023 due to supply related concerns, which benefited results at the beginning of the third quarter. Despite lower prices, volumes in Q4 2023 were higher than Q3 2023 due to increased demand in the latter half of Q4 driven by positive trends in US housing starts and the central banks indicating a pause of further interest rate hikes.
- The valuation provision for lumber and log inventory was decreased to $4.3 million from $8.7 million at the end of Q4 2022, generating a $4.4 million credit to cost of sales in fiscal 2023.
- US Department of Commerce’s (“US DOC”) Final Determination of its Fourth Administrative Review resulted in a final duty rate of 8.05%. The Company stands to benefit from an approximate US$6.9 million (CAD$9.2 million) recovery on duties paid in 2021, as recorded in 2023. Additionally, the ongoing lower duty rate has positively impacted the Company’s earnings and free cash flow since August 1, 2023.
- There continues to be downward pressure on newsprint and paper products prices.
- On November 6, 2023, the company appointed Joel Fournier as its new Chief Executive Officer. Mr. Fournier is a seasoned executive with over two decades of hands-on experience in lumber mills across both Eastern and Western Canada.
- A corporate reorganization was concluded to separate the assets from the lumber mills and the paper mill. This reorganization aims to provide for increased alignment of incentives, cost control measures and focus on the unique aspects of each business. On January 16, 2024, Terry Skiffington was engaged as Chief Executive Officer of the paper mill division. Mr. Skiffington is a skilled executive with a broad range of experience in the pulp and paper sector in Canada and globally.
“Despite ongoing pricing pressures in the fourth quarter, we are starting to see some positive momentum in lumber markets at the beginning of 2024,” said Paul Rivett, GreenFirst’s Executive Chair. “This coupled with an enhanced operational focus with Joel at the helm are factors that bode well for GreenFirst’s resiliency in the current environment. On the paper side we expect productivity gains and a better cost profile with Terry’s tenacious focus on operations, along with his many years of experience in this area.”
Source: GreenFirst Forest Products
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