Western Forest Products’ first-quarter EBITDA dropped 28% to C$9.3 million (US$9.3 million) from a year ago despite a 23.5% jump in sales to C$223.4 million (US$223.5 million), including lumber sales of C$157.2 million (US$157.2 million), for the same period, the company reported today. Net income declined by half from the first quarter of 2011 to total C$1.9 (US$1.9) million for the period.
The EBITDA result, which was cited as being in line with management’s seasonal expectations, reflects increased productivity and higher sales volumes significantly offset by higher logging costs, higher per-unit cost of lumber taken from opening inventory, increased log and lumber inventory provisions, and higher first-quarter selling and administrative expenses, the company said, noting that EBITDA margins decreased by 3% from a year ago.
Western defines EBITDA as operating income prior to operating restructuring items and other income (expenses), plus amortization of property, plant, equipment, and intangible assets, impairment adjustments, and changes in fair value of biological assets.
The company reported first-quarter lumber shipment volumes up 20% from a year ago to 220 million board feet, valued at C$157.2 million (US$157.2). The increased sales mark a 22% jump from a year ago—of this volume, 39% was sold to the Canadian market, 23% to China, 20% to Japan, and 13% to the U.S.
The company reported lumber production up 20% for the quarter, compared to the first quarter of 2011. Its sawmills operated at 91% capacity, up from 78% capacity a year ago. Conversion costs of lumber produced in the first quarter of 2012 decreased by 8% from the same period a year ago. Lumber prices during the quarter were approximately 2% higher at C$716 (US$716) per thousand board feet than the year-ago period, with Western Red Cedar prices seeing an increase of 4% for the period.