VANCOUVER, BC — The British Columbia industry displayed a remarkable turnaround in 1999, posting a profit of $600 million, the west coast’s first profitable year since 1995. In 1998, it reported a re…
VANCOUVER, BC — The British Columbia industry displayed a remarkable turnaround in 1999, posting a profit of $600 million, the west coast’s first profitable year since 1995. In 1998, it reported a record loss of $1 billion. “The BC industry has posted an improvement in net earnings of $1.6 billion over 1998,” said Craig Campbell, a partner at PricewaterhouseCoopers’ global forest and paper practice in Vancouver. “BC companies have taken their hits and put their balance sheets in order,” he noted. The improved financial picture is a result of higher commodity prices, in particular lumber, whose average selling price was $100 higher per thousand board feet in 1999 than in 1998. The outlook for 2000 is improved earnings, driven mainly by higher pulp prices. Despite the encouraging news, he cautioned that the forest industry’s return on capital remains at an unacceptably low level — both globally and in BC — where returns on investment average 6%. Campbell cited 12% as a widely accepted target.
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