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OBSERVER QUESNEL - CARIBOO
SINCE 1908
Friday, August 3, 2012VOL. 98 NO. 96
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Canfor increasing offshore shipments AUTUMN MacDONALD Observer Reporter
Hats on for summer This young bathing beauty donned a hat to challenge the water in LeBourdais Park’s splash park but getting wet was the order of the day. Autumn MacDonald photo
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uesnel to Q Mark it on yourr ca calendar! alen nda ar!
August 4 & 5
Canfor’s lumber shipments are up 16 per cent in their second quarter. The company also reported operating income of $26 million for the second quarter of 2012, compared to an operating loss of $21.5 million for the first quarter. The positive variance primarily reflected improved results in the lumber segment, where stronger markets supported higher prices. Canfor reported net income attributable to shareholders of $4.5 million, or $0.03 per share, for the second quarter of 2012, compared to a shareholder net loss of $16.2 million, or $0.11 per share, for the first quarter of 2012 and shareholder net income of $2.1 million, or $0.01 per share, for the second quarter of 2011. For the six months ending June 30, 2012, the shareholder net loss was $11.7 million, or $0.08 per share, compared to net income of $9.1 million, or $0.06 per share, for the first half of 2011. The shareholder net income for the second quarter of 2012 included various items affecting comparability with prior periods, which had an overall net negative impact of $6.6 million, or $0.05 per share. After adjusting for such items, the company’s adjusted shareholder net income for the second quarter of 2012 was $11.1 million, or $0.08 per share, up $33.4 million, or $0.24 per share, from an adjusted shareholder net loss of $22.3 million, or $0.16 per share, for the first quarter of 2012. Adjusted shareholder net income for the second quarter of 2011 was $2.6 million, or $0.02 per share. Stronger demand is being attributed to market improvements in both North American and offshore markets. Additionally U.S. housing starts are on an upward trend averaging 739,000 units seasonally adjusted annual rate (SAAR) up more than three per cent from the previous quarter.
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Canadian housing starts were also up, increasing 12 per cent from the previous quarter, to almost 230,000 units SAAR. In China, markets improved as inventories returned to more normal levels following the inventory build early in the previous quarter. Japanese demand remained solid through the quarter. Pulp markets were relatively balanced heading into the quarter but saw signs of weakness as the quarter progressed. The company announced as a result of improved conditions lumber prices “rallied.” The average spruce, pine, fir (SPF) two X four price rose 11 per cent to US$295 per Mfbm, with similar increases seen for most other grades, while the spread between Western SPF structural and utility grade pricing also narrowed. Strong prices through May triggered a reduction in the export tax in June to 10 per cent for the first time this year. Southern Yellow Pine (SYP) prices also saw similar increases over the quarter. As a result, Canfor’s lumber sales realizations saw solid gains, with a higher value sales mix also having a positive impact. For northern bleach softwood kraft (NBSK) pulp, U.S. dollar sales realizations were up slightly with the average North America list price up US$30 to US$900 per tonne. Canadian dollar sales realizations across all solid wood and pulp products were positively impacted by a one per cent weakening of the average Canadian dollar. “The improvement in lumber prices and earnings reflected a modest increase in construction activity in North America and continued solid offshore demand for Western SPF lumber products,” Canfor CEO and president Don Kayne said. “The integration of these operations has gone very smoothly, and the startup of our upgraded Radium mill in the same south-east Kootenay region of B.C. remains on schedule for the fall of this year.”
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