Canfor Pulp Income Fund posts quarterly net income of $22.1 million

The Canfor Pulp Income Fund (the Fund) has posted their second quarter results.

The Fund has a 49.8% ownership in the Canfor Pulp Limited Partnership (the Partnership). The Partnership has posted a second quarter net income of $43.1 million with record sales of $247.6 million.

The Fund reported net income of $22.1 million, representing the Fund's share of the Partnership's net income and a future income tax recovery of $0.7 million.

In the quarter, the Partnership generated adjusted distributable cash of $62.5 million, or $0.88 per unit, and the Partnership and the Fund declared distributions of $0.52 per unit.

Improved Partnership results compared to the first quarter of 2010 were attributable to higher prices for the Partnership's pulp and paper products, partially offset by the stronger Canadian dollar, lower shipments and higher freight costs.

The Partnership's operations ran well in the quarter achieving production records for both total tonnes and average daily production rate. A scheduled maintenance outage was completed at the Intercontinental Pulp Mill in the second quarter resulting in approximately 10,000 tonnes of reduced production. A scheduled maintenance outage is planned for the third quarter at the Northwood Pulp Mill with an estimated 10,000 tonnes of reduced production, with no further maintenance outages planned for the fourth quarter of 2010.

Softwood pulp markets remained tight through the second quarter of 2010 as steady demand and continued tight supply of global softwood pulp supported further price increases. The NBSK pulp list price in North America during March 2010 was US$910 per tonne with monthly price increases through the second quarter of 2010 resulting in a price for June 2010 of US$1,020 per tonne.

The NBSK pulp list price for July is unchanged from June at US$1,020 per tonne for North America. Although the global softwood supply/demand balance still favours producers, downward pressure on pricing is currently being exhibited in the market in China. A reduction in market pulp consumption from Asia combined with a typical seasonal slowdown during the summer months, may exert continued market pressure to reduce NBSK pulp list prices over the next three to six months.

On June 30, 2010 the Partnership received approval from the Canadian federal government to proceed with two Green Transformation Program projects totaling $15.6 million. The Partnership has been allocated a total of $122.2 million and expects to submit further projects for approval over the balance of 2010. These projects are expected to provide economic and environmental benefits to the Partnership's operations.

Today the Fund announced the monthly distribution of $0.22 per Fund unit for the month of July 2010, to be paid on August 13, 2010, to unitholders of record at the close of business on July 30, 2010.

Source: Canfor Pulp Income Fund