Canfor Corp., one of the world’s largest forestry companies, sees potential acquisition opportunities in the U.S. south as smaller companies struggle in the wake of carnage left by new softwood lumber duties.

“We’ve got an appetite for [mergers and acquisitions],” Canfor CEO Don Kayne said on a conference call Thursday to discuss the company’s slightly better-than-expected first quarter results.

“Clearly now with the valuations and so forth, we’re closely watching the market … so we’re just evaluating all those opportunities that may come up on an individual basis.”

The Vancouver-based company reported Wednesday first-quarter net income of $66.1 million, or 50 cents per share, more than doubling the $26 million, or 20 cents per share it reported in the first quarter of 2016.

However, its quarterly results were overshadowed by news this week that it has been slapped with a 20.26 per cent countervailing duty on softwood lumber by the U.S. government, as part of the latest escalation of an ongoing dispute over what U.S. producers believe to be unfair subsidies for their Canadian competitors.

While some of Canada’s biggest companies, including Canfor were called out by name, the rest of the industry was hit with a 19.88 per cent duty. Canfor and its large peers, includingWest Fraser Timber Co. Ltd., Resolute Forest Products Inc., and Tolko Industries Ltd. are exempt from paying the duties retroactively on all shipments since Feb.1 that others are forced to fork out.

Canfor was selected as a “mandatory respondent” to U.S. investigations into duties in November and expects legal bills related to fighting the tariffs in the first quarter will subside during the rest of the year since the action has been implemented.

Kayne said the company is well-positioned given that it has improved its balance sheet in recent quarters, adding that he also sees organic growth opportunities worth up to $300 million by 2018.

“We’re certainly in an area now that I’m glad we are with all the uncertainties that are going on everywhere.”

TD analyst Sean Steuart is fairly bullish on the company despite the new duties, which are preliminary, with a final determination expected in November. They also baked in a five per cent anti-dumping duty starting in the third quarter, which Canfor and other Canadian producers are expected to be hit with in June.

“We believe that softwood lumber trade file risk is fairly reflected in Canfor’s valuation and reiterate our positive investment bias,” he wrote in a note.

“We forecast compelling mid-term earnings and free cash flow potential tied to rising lumber prices (mostly offsetting expected duty collection) and returns tied to discretionary capex.”

The tariff is a significant hit to smaller producers, some of which have already said the new duties will result in job cuts and even mill closures. Conservative MP Todd Doherty said several small and medium-sized businesses are already considering what might have to be done as early as next Monday, the Canadian Press reported.

Previous attempts by the U.S. to impose similar duties have been thrown out in court, but companies have had to pay in the meantime.

Canfor said it anticipates “marketplace volatility” as duty investigations and negotiations progress. Meanwhile, it is also expecting improvements in North American demand for softwood lumber as the U.S. housing market is forecast to continue its gradual recovery.

Shares in the company tumbled earlier this week after the duties were announced but have since recovered and were trading at a one-year high of $19.89 midday Thursday on the Toronto Stock Exchange.