Canfor Pulp Products reports net income of $5.9 million in fourth quarter

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The corporate logo for forest products producer Canfor Corp. (TSX:CFP) is shown. THE CANADIAN PRESS/HO

VANCOUVER - Canfor Pulp Products Inc. (TSX:CFX) rose to a profit in the fourth quarter but the forestry firm's shares retreated as it announced a cut in its quarterly divided to 25 cents per share from 40 cents.

The Vancouver-based company said late Monday that its net income was $5.9 million or 17 cents per share, representing its take from a 49.8 per cent stake in the operating division Canfor Pulp LP. That compared to a loss of $11.3 million or 32 cents per share a year earlier.

But Canfor shares fell 93 cents or 6.8 per cent to $12.82 in early trading on the Toronto stock market.

Canfor noted that global softwood pulp markets softened in the three month period ended Dec. 31, 2011, and is expected to remain soft into the first quarter of this year.

"There is ample supply as historically there is minimal scheduled maintenance downtime at pulp mills during the winter months," the company said in release.

The partnership reported sales of $212.7 million and net income of $15.8 million or 22 cents per unit. However, capital spending of $28.8 million or 40 cents per unit reduced the partnerships distributable cash to minus-$3 million.

Canfor cuts timber and produces and supplies lumber, plywood, veneer, oriented strandboard, bleached softwood kraft pulp and other products.

In December, Canfor decided to permanently close its Rustad Sawmill in Prince George, B.C., and Tackama Mill in Fort Nelson, B.C.

The two mills were shut indefinitely after the 2008 collapse of the U.S. housing market. Approximately 200 people had worked at Tackama and another 150 at Rustad when they were in operation.

The company also signed a deal to buy Quebec forestry company Tembec's operations in B.C.'s southern Interior for $60 million including the Elko and Canal Flats sawmills and 1.1 million cubic metres of lumber and cutting rights from Crown and private land.

Canfor has operations in B.C., Alberta, Quebec, Washington state, and North and South Carolina.