West Fraser Timber Co. Ltd. announced financial results for Q1 2019. The company reported adjusted EBITDA of $110 million, equivalent to 9% of the total sales which stood at $1.2 billion.
West Fraser’s lumber segment operating earnings totaled $2 million, whereas adjusted EBITDA totaled $84 million. The SPF and SYF production witnessed substantial decline during the quarter, mainly on account of curtailment of third shift at Quesnel and Fraser Lake sawmills and temporary production curtailments at Williams Lake, Chasm, 100 Mile and Chetwynd sawmills. Meantime, improved plywood pricing benefited the panels segment earnings, which rose from $4 million in Q4 ’18 to $11 million in the first quarter of 2019. Also, the pulp and paper segment generated operating earnings of $1 million.
According to the company, the positive signs from the U.S. housing sector in early-2019 are likely to translate into increased lumber demand in the forthcoming quarters. The challenging fibre costs in B.C. region are likely to hit quota wood in H2 2019. West Fraser expects the U.S. South fibre costs to moderate in the near term.
The company press release noted that the quarter witnessed a permanent reduction in B.C. production capacity by 300 million board feet per annum. In addition, it curtailed 125 million board feet of B.C. production. The company reinvested $108 million and returned $64 million to shareholders through share buybacks and dividends.
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