West Fraser Timber Co. reported Thursday its earnings after discontinued operations swung to a C$63 million (US$60.5 million) profit in the second quarter from a C$39 million loss in the year-earlier period. Meanwhile, fellow Western Canadian compoany International Forest Products Ltd. (Interfor) reported a net loss of C$2.6 million in the second quarter, improving markedly from its C$15 million loss in 2009's second quarter.
Sales at Vancouver, B.C.-based West Fraser grew 12.4% in the second quarter from the April-June 2009 period to C$688 million. Company chairman, president and CEO Hank Ketcham credited higher prices as the biggest reason for the improved results but also noted that production and shipments by the lumber division rose.
West Fraser's lumber segment generated operating earnings of C$47 million and EBITDA (earnings before interest, taxes, depreciation, and amortization) of C$75 million. Sales shot up 30.6% to C$440 million. Production of SPF increased 16.1% tgo 860 million board feet, while production of SYP increased 7.4% to 363 million board feet. Shipment increased about 8% from the first quarter, in part thanks to double-digit growth in shipments to Japan and China.
Meanwhile, the panel segment--which makes plywood, LVL and MDF, posted operating earnings of C$15 million and EBITDA of C$20 million, partly because plywood prices increased 14% from the first quarter. Plywood output grew by 11.9% to 207 million square feet on a 3/8-inch basis.
Looking ahead, West Fraser predicted lower lumber prices in the second half of the year because of continued weak U.S. demand.
Like West Fraser, this year's second quarter was a marked improvement from its year-earlier counterpart. EBITDA swung to C$13.1 million from a negative C$7.3 million in the April-June 2009 period. Lumber sales nearly doubled to C$123.7 million, while log sales were almost 50% higher at C$19.8 million.
"Higher commodity prices in April and early May were quickly offset by lower activity levels and prices in late May and June," Interfor president and CEO Duncan Davies said in a statement.
In volume terms, Vancouver-based Interfor's lumber sales rose 2.3% to 270 million board feet.