Eacom reports positive results for second quarter
Eacom Timber Corporation announced positive earnings in the second quarter of 2012 as well as details about the commencement of the reconstruction of its Timmins sawmill and upgrades in Nairn Centre and Elk Lake.
According to the company, a significant improvement in housing activity had a positive impact on lumber consumption during the quarter. As a result, Eacom recorded a positive EBITDA of $2,862,000 for the second quarter ended June 30, 2012, against a negative EBITDA of $5,309,000 in the previous quarter and a negative EBITDA of $9,892,000 in the corresponding quarter of 2011.
The company also announced it has determined to commence reconstruction of the Timmins mill, which had been destroyed by fire earlier this year. During the second quarter, it initiated capital improvements targeted at increasing the production capacity at two of its mills, Nairn Centre and Elk Lake. Improvements at Nairn Centre are well underway and should be completed in the third quarter.
Construction at Elk Lake has just started and completion is scheduled in the early part of the fourth quarter following a three-week shutdown of the mill. Once completed, these upgrades are expected to partially offset the capacity lost at Timmins and mitigate some of the damages incurred as a result of the fire. A significant portion of these investments will be reimbursed under the business interruption insurance claim. To date, the Company has received $17,000,000 of insurance proceeds, of which $10,000,000 for damage or destruction of assets and $7,000,000 related to business interruption.
‘The Company intends to continue its focused capital investments with a view to increase capacity and recovery, and reduce manufacturing costs. This should contribute to improve our competitiveness in the global forestry sector, and provide a more stable and sustainable employment environment for our employees in the communities where we operate’, stated Rick Doman, President and CEO.
During the second quarter, Eacom recorded sales of $65,256,000, up 9% against sales of $59,941,000 in the previous quarter but down 8% against sales of $71,171,000 in the corresponding quarter of 2011. Its sales include both lumber and by-product sales. During the quarter, it shipped 133 million board feet of lumber (128 million board feet in the previous quarter and 160 million board feet in the corresponding quarter of 2011) and 119,000 oven-dried metric tons of by-products (120,000 oven-dried metric tons in the previous quarter and 140,000 oven-dried metric tons in the corresponding quarter of 2011). Compared to the corresponding quarter of 2011, shipments reflect lower production volumes.