VANCOUVER, British Columbia, March 05, 2026 (GLOBE NEWSWIRE) -- Canfor Pulp Products Inc. (“The Company” or “CPPI”) (TSX: CFX) today reported its fourth quarter of 2025 results:
Overview.
- Q4 2025 operating loss of $85.6 million; net loss of $133.6 million, or $2.05 per share.
- As a result of the prolonged weakness in global pulp markets and the Company's persistent challenges accessing economically viable fibre, an asset write-down and impairment charge totaling $106.5 million was recognized in Q4 2025, which included a write-off of a previously recognized deferred tax asset of $52.5 million.
- After taking into consideration adjusting and one-time items1 totaling $57.5 million, the adjusted operating loss for Q4 2025 was $28.1 million, compared to a similarly adjusted operating loss of $11.1 million in Q3 2025.
- Global softwood pulp markets were relatively flat through Q4 2025, principally driven by elevated pulp producer inventory levels.
- Pulp production declined 4% in Q4 2025 (versus Q3 2025) primarily due to a scheduled maintenance outage at its Northwood NBSK pulp mill, including a slower than anticipated restart.
- Jointly with Canfor, the Company announced in December 2025 it had entered into an Arrangement Agreement, where Canfor would acquire all of the issued and outstanding common shares of Canfor Pulp not already owned by Canfor, for either $0.50 in cash consideration or 0.0425 of a common share of Canfor (the "Proposed Transaction"). Closing is anticipated in Q1 2026 and is subject to all applicable shareholder, court and regulatory approvals.
- As announced in February 2026, Management's forecasts indicate a breach of financial covenants is highly probable as early as March 31, 2026. Should the Proposed Transaction not close, the Company would re-engage with its lenders for further temporary relief while it works to undertake a restructuring process.
Financial results.
The following table summarizes selected financial information for CPPI for the comparative periods:
| (millions of Canadian dollars, except per share amounts) | Q4 2025 | Q3 2025 | YTD 2025 | Q4 2024 | YTD 2024 | |||||||||||||||||||||
| Sales | $ | 140.2 | $ | 164.6 | $ | 678.9 | $ | 163.1 | $ | 798.6 | ||||||||||||||||
| Reported operating income (loss) before amortization, asset write-downs and impairment2 | $ | (20.1 | ) | $ | (7.2 | ) | $ | (2.5 | ) | $ | 12.3 | $ | 43.3 | |||||||||||||
| Reported operating income (loss) | $ | (85.6 | ) | $ | (16.0 | ) | $ | (96.1 | ) | $ | 4.1 | $ | (226.5 | ) | ||||||||||||
| Net income (loss)3 | $ | (133.6 | ) | $ | (12.4 | ) | $ | (146.7 | ) | $ | 2.9 | $ | (161.9 | ) | ||||||||||||
| Net income (loss) per share, basic and diluted3 | $ | (2.05 | ) | $ | (0.19 | ) | $ | (2.25 | ) | $ | 0.04 | $ | (2.49 | ) | ||||||||||||
1. Adjusted operating loss as well as adjusting and one-time items referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the "Fourth quarter results, including adjusting and one-time items" table and the “Non-IFRS financial measures” section of this news release.
2. An asset write-down and impairment charge totaling $106.5 million was recorded in Q4 2025 (Q3 2025 and Q4 2024 – no asset write-down and impairment adjustment was recognized), which included a $52.5 million write-off of a previously recognized deferred tax asset. The deferred tax asset write-off is not included in reported operating income (loss) and as a result, reported operating income (loss) in the table above, is only adjusted by $54.0 million, representing the asset write-down and impairment charge associated with property, plant and equipment and material and supplies inventories.
3. Attributable to equity shareholders of the Company.
The Company reported an operating loss of $85.6 million for the fourth quarter of 2025, compared to an operating loss of $16.0 million for the third quarter of 2025.
Commenting on the Company’s fourth quarter results, CPPI’s President and Chief Executive Officer, Stephen Mackie, said, “The Company faced another extremely challenging quarter, as ongoing global economic uncertainty weighed heavily on softwood pulp market conditions. As a result, we remain cautious heading into 2026 as we continue to navigate significant external pressures on our business, including the prolonged downturn in softwood pulp markets and the ongoing constraints in securing economically viable fibre.”
Fourth quarter results, including adjusting and one-time items.
As previously announced, during the fourth quarter of 2025, the Company identified several indicators of impairment under IFRS Accounting Standards, including sustained declines in global US-dollar pulp list prices, persistent challenges in securing economically viable fibre, a reduction in the Company's market capitalization and an increased risk of financial covenant non-compliance. Consequently, the Company recognized a non-cash asset write-down and impairment charge totaling $106.5 million in the current quarter, which included a write-off of a previously recognized deferred tax asset of $52.5 million.
After taking account of adjusting items totaling $57.5 million, as outlined in the table below, the Company's adjusted operating loss was $28.1 million, compared to an adjusted operating loss of $11.1 million for the third quarter of 2025. These adjusted results largely reflect the continued impact of soft global pulp market conditions throughout most of the current period, combined with reduced pulp production associated with the Company's scheduled maintenance downtime at its Northwood Northern Bleached Softwood Kraft ("NBSK") pulp mill ("Northwood").
| (millions of Canadian dollars) | Q4 2025 | Q3 2025 | YTD 2025 | Q4 2024 | YTD 2024 | |||||||||||||||
| Reported operating income (loss) | $ | (85.6 | ) | $ | (16.0 | ) | $ | (96.1 | ) | $ | 4.1 | $ | (226.5 | ) | ||||||
| Asset write-down and impairment⁴ | $ | 54.0 | $ | – | $ | 54.0 | $ | – | $ | 211.0 | ||||||||||
| Inventory write-down, net⁵ | $ | 3.5 | $ | 4.9 | $ | 11.3 | $ | – | $ | – | ||||||||||
| Adjusted operating income (loss)⁶ | $ | (28.1 | ) | $ | (11.1 | ) | $ | (30.8 | ) | $ | 4.1 | $ | (15.5 | ) | ||||||
| Amortization | $ | 11.5 | $ | 8.8 | $ | 39.6 | $ | 8.2 | $ | 58.8 | ||||||||||
| Adjusted operating income (loss) before amortization, asset write-down and impairment⁴˒⁶ | $ | (16.6 | ) | $ | (2.3 | ) | $ | 8.8 | $ | 12.3 | $ | 43.3 | ||||||||
1. An asset write-down and impairment charge totaling $106.5 million was recorded in Q4 2025 (Q3 2025 and Q4 2024 – no asset write-down and impairment adjustment was recognized), which included a $52.5 million write-off of a previously recognized deferred tax asset. The deferred tax asset write-off is not included in reported operating income (loss) and as a result, reported operating income (loss) in the table above, is only adjusted by $54.0 million, representing the asset write-down and impairment charge associated with property, plant and equipment and material and supplies inventories.
2. A $3.5 million net inventory write-down expense was recognized in Q4 2025 (Q3 2025 – $4.9 million net inventory write-down expense, Q4 2024 – no inventory valuation adjustment was recognized).
3. Adjusted results referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the “Non-IFRS financial measures” section of this document.
Fourth quarter highlights.
Global softwood pulp markets were relatively flat through the fourth quarter of 2025, driven mainly by elevated pulp producer inventory levels. Towards the end of the period, however, buyer sentiment began to improve. Lower global pulp prices prompted a modest uptick in purchasing activity, particularly in China, as producers worked to draw down higher-than-average inventory levels. As a result, US-dollar NBSK list prices to China, the world’s largest pulp consumer, gained some positive momentum late in the quarter, finishing December at US$690 per tonne. Despite this late uplift, for the fourth quarter overall, US-dollar NBSK pulp list prices to China averaged US$671 per tonne, down US$19 per tonne, or 3%, from the prior quarter. Outside China, market conditions remained difficult. Demand and pricing in other global regions weakened through the fourth quarter, with the average US-dollar NBSK pulp list price to North America falling by 8% from the previous quarter.
Global softwood pulp producer inventories remained elevated and at the top end of the balanced range throughout the current quarter, ending December 2025 at 47 days of supply, in line with September 2025. Market conditions are typically considered balanced when inventories fall within the 39-47 days of supply.
The Company’s average NBSK pulp unit sales realizations in the current quarter experienced a modest decline relative to the previous quarter, principally a result of the decrease in global US-dollar NBSK pulp list prices, partially offset by a 1% weaker Canadian dollar.
Pulp production was 103,000 tonnes for the fourth quarter of 2025, down 4,000 tonnes, or 4%, from the third quarter of 2025. Early in the current quarter, the Company successfully completed its scheduled maintenance outage at Northwood as planned. However, the restart of Northwood was delayed by several days due to operational difficulties unrelated to the scheduled maintenance downtime. Combined, these factors impacted NBSK pulp production by approximately 15,000 tonnes in the current quarter.
Operating income in the Company's paper segment was $5.5 million, compared to $5.0 million in the third quarter of 2025, largely due to the weaker Canadian dollar, combined with slightly lower paper unit manufacturing costs.
In December 2025, as a result of a forecast covenant breach at December 31, 2025, the Company renegotiated its existing operating loan facility. Under the terms of the amended agreement, the Company granted security to Canfor Pulp’s lenders and obtained a waiver of its financial covenants for the quarter ended December 31, 2025 (the “Covenant Relief Period”). During the Covenant Relief Period, the Company was subject to a minimum liquidity test of $10.0 million, effectively reducing its operating loan facility from $160.0 million to $150.0 million. This Covenant Relief Period only applied to the quarter ended December 31, 2025, and does not apply to future periods.
At December 31, 2025, CPPI had a net debt to total capitalization ratio of 116.1% and a minimum earnings before interest, taxes, depreciation and amortization ("EBITDA") interest coverage ratio of (0.1) times, as defined under the terms of its operating loan facility. As a result of the Covenant Relief Period, the lenders have agreed not to exercise any rights and remedies in respect of the covenant breach at December 31, 2025.
Pulp outlook.
Looking ahead, global softwood kraft pulp market conditions are anticipated to remain weak into 2026 as ongoing economic uncertainty, particularly between China and the US, continues to weigh on market demand despite some cautious optimism seen late in 2025.
The Company continues to closely monitor developments in Canada–US trade relations. Should tariffs be applied to US pulp and paper shipments, the Company has mitigation strategies in place that are projected to partially offset potential impacts.
No major maintenance outages are planned at the Company's pulp mills for the first quarter of 2026. In the second quarter of 2026, a maintenance outage is scheduled at the Company's Intercontinental NBSK pulp mill (“Intercon”) with a projected 20,000 tonnes of reduced NBSK market pulp production. For the rest of 2026, no further scheduled downtime at the Company's pulp mills is anticipated.
As announced on February 17, 2026, Management’s forecast indicates that due to global pulp market conditions remaining weak, ongoing macroeconomic headwinds and continued challenges accessing economic fibre in British Columbia, the Company may experience continued declines in financial performance during the first quarter of 2026, making it highly probable that CPPI will not comply with its financial covenants at March 31, 2026.
Although Management is undertaking mitigation initiatives and advancing the Proposed Transaction, the ultimate success of these actions cannot be assured at this time. Management’s discussions with its lenders regarding future financial covenant relief are currently on hold, pending the outcome of the Proposed Transaction. Should the Proposed Transaction not close, the Company would re-engage with its lenders for further temporary relief while it works to undertake a restructuring process.
Paper outlook.
Demand for bleached kraft paper, both globally and within North America, is anticipated to remain subdued throughout the first half of 2026. This forecast trend is primarily attributed to ongoing uncertainties in Canada–US trade relations, coupled with broader global economic challenges such as overcapacity and stable demand.
A maintenance outage is currently planned at the Company's paper machine in the second quarter of 2026 with a projected 10,000 tonnes of reduced paper production.
Refer to the Company’s annual Management’s Discussion and Analysis for further discussion on the Company’s results for the fourth quarter of 2025 on page 14.
Additional information and conference call.
A conference call to discuss the fourth quarter’s financial and operating results will be held on Friday, March 6, 2026, at 9:00 AM Pacific time. To participate in the call, please click here. The instant replay access will be available until May 1, 2026, on canfor.com/investors, under Webcasts.
The conference call will be webcast live and will be available at canfor.com. This news release, the attached financial statements and a presentation used during the conference call can be accessed via the Company’s website at canfor.com/investors.
Non-IFRS financial measures.
Throughout this press release, reference is made to certain non-IFRS financial measures which are used to evaluate the Company’s performance but are not generally accepted under IFRS and may not be directly comparable with similarly titled measures used by other companies. The following table provides a reconciliation of these non-IFRS financial measures to figures reported in the Company’s condensed consolidated interim financial statements:
| (millions of Canadian dollars, net of tax) | Q4 2025 | Q3 2025 | YTD 2025 | Q4 2024 | YTD 2024 | |||||||||||||||||||||
| Net income (loss) | $ | (133.6 | ) | $ | (12.4 | ) | $ | (146.7 | ) | $ | 2.9 | $ | (161.9 | ) | ||||||||||||
| Asset write-down and impairment, net of tax | $ | 106.5 | $ | – | $ | 106.5 | $ | – | $ | 154.0 | ||||||||||||||||
| Adjusted net income (loss) | $ | (27.1 | ) | $ | (12.4 | ) | $ | (40.2 | ) | $ | 2.9 | $ | (7.9 | ) | ||||||||||||
Forward-looking statements.
Certain statements in this press release constitute “forward-looking statements” which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. These forward-looking statements include, among others, statements relating to: the recording of an impairment charge; the expected non-compliance with financial covenants; the Company’s intention to re-engage with its lenders for further temporary relief; and, the Company does not expect this news to have any adverse effect on completing the Proposed Transaction. Words such as “expects”, “anticipates”, “projects”, “intends”, “plans”, “will”, “believes”, “seeks”, “estimates”, “should”, “may”, “could”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on current expectations and beliefs and actual events or results may differ materially.
Although the Company believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from the expectations of the management of the Company, respectively, and plans as set forth in such forward-looking statements, including, without limitation, the following factors, many of which are beyond the Company’s control and the effects of which can be difficult to predict: it is uncertain if future temporary relief from financial covenants can be obtained or, if obtained, if such relief would be on terms and conditions acceptable to the Company; the possibility that the Proposed Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required court, shareholder and regulatory approvals and other conditions of closing necessary to complete the Proposed Transaction or for other reasons; the possibility of adverse reactions or changes in business relationships resulting from this announcement; the possibility of litigation relating to the Proposed Transaction; credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Proposed Transaction, including changes in economic conditions, interest rates, commodity prices, tariffs, duties and import taxes; risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, competition, seasonality, commodity price and business; and other risks inherent to the Company’s business and/or factors beyond its control which could have a material adverse effect on the Company or the ability to consummate the Proposed Transaction. With respect to the forward-looking statements contained in this news release, the Company has made numerous assumptions regarding, among other things, the ability of Canfor Corporation and the Company to satisfy all of the closing conditions to complete the Proposed Transaction and the non-occurrence of the risks and uncertainties that are described in the public filings of the Company or other events occurring outside of its normal course of business.
The Company cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause the Company’s actual results to differ from current expectations, please refer to the “Risks and uncertainties” section of the Company’s Management’s Discussion & Analysis for the year ended December 31, 2025 as well as the Company’s other public filings, available at sedarplus.ca and at canfor.com.
The forward-looking statements contained in this news release describe the Company’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.
About Canfor Pulp.
Canfor Pulp is a leading global supplier of pulp and paper products with operations in the northern interior of British Columbia. Canfor Pulp operates two mills in Prince George, British Columbia, with a total capacity of 480,000 tonnes of Premium Reinforcing Northern Bleached Softwood Kraft pulp and 140,000 tonnes of kraft paper. The Common Shares are traded on the TSX under the symbol CFX. For more information visit canfor.com.
| Media Contact: | Investor Contacts: | ||
| Mina Laudan VP, Corporate Affairs (604) 661-5225 media@canfor.com | Pat Elliott CFO and Corporate Secretary (604) 661-5441 Patrick.Elliott@canfor.com | Dan Barwin Head of Corporate Development (604) 661-5390 Daniel.Barwin@canfor.com |
