West Fraser sees earnings dip in Q1 2019 from lower production
By P&PC Staff
By P&PC Staff
April 26, 2019 – West Fraser Timber Co. Ltd. has released its Q1 2019 results, citing lower production and demand as the reason for its earnings dip across the lumber and pulp and paper segments.
Sales for Q1 were $1.2 billion, with adjusted EBITDA of $110 million or nine per cent of sales.
The pulp & paper segment generated operating earnings of $1 million (compared to Q4 18 earnings of $36 million) and adjusted EBITDA of $11 million ($47 million in Q4 2018).
This gave rise to higher manufacturing costs, which, when accompanied with lower pulp pricing, resulted in lower operating earnings compared to the previous quarter.
This was partially offset by lower fibre costs, higher BCTMP shipment volumes and lower manufacturing costs at the Quesnel River pulp mill following their planned shutdowns in the fourth quarter of 2018.
The company has an upcoming maintenance shut down in May at its jointly owned NBSK mill in Quesnel.
The lumber segment generated operating earnings of $2 million (compared to a Q4 ’18 $22 million loss) and adjusted EBITDA of $84 million (Q4 ’18 $68 million).
The current quarter’s results were negatively impacted by lower SPF and SYP production and a decline in SPF market demand compared to the previous quarter.
West Fraser curtailed 125 million board feet of B.C. production in the quarter, and has permanently reduced B.C. production by 300 million board feet on an annual basis.
Read the full West Fraser Q1 2019 financial report.