TORONTO, ON, March 14, 2023 - GreenFirst Forest Products Inc. (TSX: GFP) (“GreenFirst” or the “Company”) today announced results for the fourth quarter and year ended December 31, 2022.
The Company’s annual financial statements (“Financial Statements”) and related Management Discussion and Analysis (“MD&A”) for the year ended December 31, 2022 are available on GreenFirst’s website at www.greenfirst.ca and on SEDAR at www.sedar.com. All amounts are in thousands of Canadian dollars unless indicated otherwise.
Fourth Quarter of 2022 Highlights
- Fourth quarter 2022 (“Q4 2022”) net loss from continuing operations was $25.9 million or a $0.15 loss per share (diluted), compared to net loss of $16.3 million or $0.09 loss per share (diluted) in the third quarter of 2022 (“Q3 2022”) on the same basis . This result reflects the sharp downturn in lumber market prices seen during the fourth quarter. Q4 2022 Adjusted EBITDA from continuing operations was negative $27.4 million, compared to a negative $2.0 million in Q3 2022 on the same basis. Adjusted EBITDA for continuing operations before duties expensed for Q4 2022 was negative $19.6 million, compared to positive $7.2 million in Q3 2022.
- Lumber prices dropped, reflecting economic headwinds and lower demand in Q4 2022, with an average selling price of $644/mfbm compared to $800/mfbm in Q3 2022. Steadily rising interest rates since Q2 2022, in response to high inflation, reduced US housing starts and caused flagging homebuilders’ confidence, which worsened during the fourth quarter.
- On November 7, 2022, the Company announced the sale of its 203,000 acres of private forest land south of Kapuskasing, Ontario, to a third party for net cash proceeds of $48.7 million.
- On December 21, 2022, the Company announced the sale of its La Sarre and Béarn sawmills and its Abitibi and Témiscamingue forestry operations, as well as their related assets and other Quebec business operations to Chantiers Chibougamau Ltée for cash proceeds of approximately $94 million, subject to final adjustments, which closed on March 14, 2023.
- Candice Bergen was appointed to the Company’s Board of Directors, effective March 14, 2023.
“The fourth quarter presented a worsening economic backdrop, with results showing it, however the liquidity from our $49 million land sale and our recent $94 million sale of our Quebec sawmills gives us the flexibility to tackle our strategy and take advantage of opportunities”, said Paul Rivett, interim CEO and executive Chairman of GreenFirst.
Acquisition of Sawmills and Paper Mill
On August 28, 2021, the Company acquired six sawmills and one paper mill from Rayonier Advanced Materials (the “Rayonier Asset Acquisition”) for aggregate consideration of $296.1 million. The Company has measured and recorded the identifiable assets acquired and the liabilities assumed at management’s estimates of their acquisition-date fair values. For further information on the purchase price accounting, please refer to the Company’s Financial Statements.
Source: GreenFirst Forest Products
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