One of B.C.’s newest forestry companies is shipping most products overseas, but that has yet to help it wash the red ink from its balance sheet.
On Thursday, Vancouver-based Conifex Timber (TSX-V:CFF), which has mills in Fort St. James and Mackenzie, posted a $3.6 million loss on $26.9 million in revenue.
Despite the loss, Conifex posted an 18% increase in lumber shipments in the second quarter.
Lumber production increased 148% to 102.4 million board feet compared with the same quarter in 2010.
The company shipped 83% of its goods to export markets in the second quarter compared with 41% during the same period last year.
Conifex said its primary export markets are China and Japan.
Last week, the provincial government announced that the value of softwood lumber shipments to China exceeded the U.S. in July for the second month in a row.
Still, Conifex CEO Ken Shields said there is some belief in the market that China could be oversupplied with lumber and that a market correction is on the way.
“It’s not clear to us whether we’re going to continue to have the same level of price support for North American lumber that the China shipments have provided in the past, there may be a bit of a correction in China similar to what we might see in the bull market in the stock market,” Shields said during a conference call Friday.
Shields said he wasn’t sure if the company would be able to show much of an improvement in earnings in the third quarter.
At press time, Conifex’s shares were unchanged at $9.
Joel McKay
Twitter:jmckaybiv