Editor's Note: All figures below are in Canadian dollars (C$). As of today, C$1 equals US$1.0035. Given that close parity, we have omitted currency conversions.
West Fraser's lumber segment swung to a C$29.8 million pretax loss from continuing operations in the fourth quarter from a C$21.1 million profit in the year-earlier period, while its panels unit dipped C$800,000 into the red from a year-earlier C$2.4 million profit, the company reported today.
Lumber sales dropped 6.4% to C$391.6 million while panels sales slipped just C$100,000, or 0.1%, to C$94.2 million. Vancouver, British Columbia-based West Fraser attributed the decline in lumber results to weaker prices for lower-grade SPF (spruce-pine-fir) lumber and wider-dimension SYP (Southern yellow pine) lumber as well as reduced shipments. On the other hand, the panel segment--which includes plywood, LVL (laminated veneer lumber ) and MFD (medium density fiberboard), was buoyed by higher prices for playwood and MDF when measured in Canadian dollars.
Company wide, West Fraser's earnings after discontinued operations plummed to C$6 million from C$43 million in the October-December 2010 period on a 10% decline in sales to C$650 million. For the full year, earnings after discontinued operations shrank by nearly two-thirds to C$73 million from 2010's C$186 million as sales shrank 4.3% to C$2.76 billion.
"We ended a challenging year with a difficult quarter as markets for our products continue to be very unsettled," Hank Ketcham, West Fraser's chairman, president, and CEO said in a statement. "... We are approaching 2012 with conservatism and caution in light of ongoing economic uncertainty in our key markets and the continuing volatility of the Canadian dollar. We will continue to invest in our existing facilities in order to maintain and improve our competitiveness."