West Fraser Timber fell into the red in the first quarter, from the same period a year ago, with a net loss of C$16.7 million (US$16.7 million), the company announced today. Sales at the timber and wood products manufacturer fell $6 million to C$681 million (US$680.3 million) for the period ended March 31.
The Vancouver, British Columbia-based timber, pulp, and wood product manufacturer reported an overall operating loss of C$22 million (US$22 million). Loss from continuing operations was C$17 million (US$17 million).
The company said its lumber operations reported an operating loss of C$29 million (US$29 million) compared to a C$33 million (US$33 million) income a year ago. Sales dipped 3% to C$398 million (US$397.6 million). Earnings plus amortization, which the company labels as EBITDA, was negative C$6 million (US$6 million), a far cry from the C$55 million (US$54.9 million) in EBITDA the segment posted last year.
The results reflect lower average prices for Spruce-pine-fir lumber (SPF) and increased Canadian log prices, as well as the effects of several capital improvement projects that took place during the quarter.
Production of SPF rose just under 1% to 883 million board feet, while Southern yellow pine production fell 9% to 347 million board feet.
West Fraser’s panel segment, which includes its plywood, laminated veneer lumber (LVL), and medium density fibreboard (MDF) operations generated an operating income of C$1 million (US$1 million) behind a 15% increase in sales to C$105 million (US$105 million). The unit’s EBITDA was C$5 million (US$5.1 million).
Plywood (3/8-inch) production rose 3% to 201 million square feet as MDF (3/4-inch) production stayed almost flat at 49 million square feet. LVL manufacturing jumped 35% to 548 million cubic feet.
“Although there are some improvements in our markets, we will continue to monitor capital spending and focus on maintaining a strong balance sheet as the North American and Asian economies remain fragile,” said Hank Ketcham, the company’s chairman, president and CEO.
Externally, just under a quarter of West Fraser’s sales, or C$164.9 million (US$164.7 million), went to China and Asia. The U.S. accounted for C$317.7 million (US$317.4 million), or 47% of sales.
Editor’s Note: The exchange rate for Canadian to U.S. dollars the company provided for the quarter was $.999, which is why many of the numbers in the article are identical.