Canfor Corp. chief executive officer Don Kayne isn't letting a year many would rather forget get in the way of a relatively upbeat outlook over the coming months.
The lumber producer reported a $44.1 million net loss, or 31 cents per share, attributable to shareholders in the fourth quarter ended Dec. 31. That compared with shareholder net income of $32.9 million 23 cents per share in the fourth quarter of 2010.
Conditions in the U.S. housing market were steady over the quarter and in line with expectations but it will be a further 18 to 24 months before the American market returns to normal levels, Kayne said Thursday during a conference call.
Shipments to Asia Pacific continued to be "very strong" with volume 15 per cent higher in the most recent quarter compared to the same period in 2010, "reflecting continued growth into China" as well as into Japan and Korea.
Kayne, who is in China with the federal trade mission, said the country's government aims to build up to 10 million units of affordable housing each year.
"That's really where we see the huge opportunity over and above the progress that we've made," Kayne said and added the number was provided during a meeting this week with the vice prime minister in China.
The company will also continue with a $300 million capital expenditure program. Two-thirds of that money has now been spent with about $116 million
attributed to the fourth quarter.
The spending will put Canfor on good footing once the U.S. has turned around, Kayne said.
"As demand recovers in North America and continues to grow in Asia, Canfor will be well positioned to prosper," Kayne said.
Log costs rose moderately, chief financial officer Alan Nichol said, due to a shortage of log trucks and parts in the B.C. Interior, higher diesel prices and unseasonably mild weather which meant fewer logs were delivered to mills.
Although prices for low-grade lumber declined, Kayne said demand for grade two and better has increased.
"We're seeing that low-grade prices are moving up to some degree," Kayne said.
"Whether they'll get back up to where they were, it's too early to tell, and I don't think they will personally.
"I think we'll see more of the benefit in higher two and better prices."
