Feb. 23, 2017 - EACOM Timber Corporation welcomes news by Canadian Natural Resources Minister Jim Carr of the creation of the Federal-Provincial Task Force on Softwood Lumber, which will coordinate current programs and assess domestic initiatives as Canada continues to negotiate with the United States.''We thank the Canadian Government for its efforts to reconcile the needs across the country and are grateful to the Ontario and Quebec Governments for their advocacy to safeguard their provincial softwood lumber industries'' said Kevin Edgson, EACOM CEO.For EACOM, which operates 7 sawmills in Ontario and Quebec, access to the American market is critical to maintain and grow our business. Given the importance of Canadian softwood lumber imports to the U.S. economy, the company was disappointed that the U.S. Lumber Coalition filed a petition with the Department of Commerce to institute duties to be imposed on Canadian softwood lumber shipments to the United States.''Collaboration between federal and provincial governments, along with industry, will be paramount as we position ourselves to defend Canada's interests. Canada-U.S. trade is of vital importance for both countries. Arriving at an appropriate resolution is possible when you have two partners willing and ready to work through the issues,'' added Edgson.In the face of uncertainty, EACOM has been committed to strengthening its balance sheet and maintaining strong assets to position us for future stability and growth. Many of our mills have a long, rich history, having been part of their communities for over 100 years. Since 2012, EACOM has invested over $63 million in its Ontario and Quebec facilities to increase production and employment levels. Investments such as these demonstrate our commitment to enhancing Canada's softwood lumber industry and associated communities to the health and prosperity that should be theirs.
Feb. 22, 2017 - The BC Lumber Trade Council (BCLTC) welcomes the announcement Wednesday by Natural Resources Canada to establish a federal-provincial task force on softwood lumber. “BC lumber producers welcome Minister Jim Carr’s initiative to create a task force on softwood lumber to share information and coordinate programs that promote innovation and market diversification in the forest sector,” said Susan Yurkovich, president of the BC Lumber Trade Council. “Coordination of efforts between the federal and provincial governments is critical as we work to understand the potential impacts of the softwood lumber trade dispute with the U.S. on our workers and communities.” “We appreciate that the federal government, including the Prime Minister, Minister Chrystia Freeland, Minister Jim Carr and Ambassador David MacNaughton, have made softwood lumber a top priority,” said Yurkovich. “They, along with industry and provincial governments, are doing everything possible to defend our interests on softwood lumber.” “We welcome this enhanced coordination between the federal and provincial governments,” added Yurkovich. “The BC Lumber Trade Council will continue to work alongside governments to seek a resolution to this dispute.” B.C. is the largest producer of softwood lumber and represents about 50 per cent of Canadian exports to the U.S. The B.C. forest industry is the cornerstone of the provincial economy, and supports approximately 145,000 direct and indirect jobs in the province. The BC Lumber Trade Council is the voice on trade matters for companies in British Columbia representing the majority of B.C. lumber production.
Feb. 22, 2017 - At this year’s Elmia Wood the unmanned aerial vehicles will have their own separate section called the Drone Zone. The fair is collaborating with UAS Forum Sweden, which arranges Sweden’s leading conference in the field, and which is assembling experts and suppliers for the fair. “I hope visitors to Elmia Wood will go home having realised that drones are not a futuristic vision but are mature technology ready to be used in the forest industry.” So says Hans Thunander, a certified forester who is already working with drones in the forest. “There will be presentations and shows several times each day,” explains Urban Wahlberg of UAS Forum. “The exhibitors will be leading suppliers of applications and equipment.” Drones are not completely new at Elmia’s forestry fairs. Hans Thunander says futuristic technology was exhibited at the previous edition of the fair to inspire the forest industry to think of new applications for the drones. Now they are a mature tool ready to be used. “To me a drone is like a pair of binoculars that can see around corners,” he says. “It’s just as natural an aid as the other technology we’re already using.” Survey larger areas Drones are strongly associated with camera surveillance but that is not their purpose in the forest. Instead they are used to gain an overview of larger areas. Using various types of sensors they can find windthrow, monitor stressed trees, count game and so on. “Just imagine not having to walk and drive through large tracts of land after a storm,” Thunander says as an example. “With a drone you can concentrate your efforts on where the damage is.” Because Elmia Wood is held out in the forest, the drones can be demonstrated in realistic conditions. The Drone Zone is located along Elmia Wood’s large-scale forest trail. Visitors can see with their own eyes the practical benefits of using drones. “The fair is designed to be the place where the international forest industry discovers the latest technologies and applications,” says Jakob Hirsmark, Exhibition Manager for Elmia Wood. “Drones are becoming an ever-more important part of forestry within the immediate future and that’s why they have a self-evident place at the world’s biggest forestry fair.” Elmia Wood is the world’s leading forestry fair and is held every four years outdoors in the forests south of Jönköping, Sweden. The last Elmia Wood (2013) had over 500 exhibitors and 50,000 visitors from around the world and was widely reported on by the international trade press. From June 7–10, 2017 the global forest industry will meet again. www.elmiawood.com
Feb. 22, 2017 - Forest company leaders from across Alberta met with Premier Notley to discuss Alberta’s trading relationship with the United States and the future vitality of Alberta’s forest sector.“We greatly appreciate the dedication of Premier Notley and her government to this very important file,” said Paul Whittaker, president and CEO of the Alberta Forest Products Association. “By working closely together, we can ensure a strong future for the forest sector and the thousands of Albertans who work in it.”Meeting participants also included Honourable Deron Bilous, Minister of Economic Development and Trade and Honourable Oneil Carlier, Minister of Agriculture and Forestry. Topics of discussion included developing new uses for forest products in Alberta, expanding exports to Asian markets, and dealing with challenges posed by the softwood lumber dispute with the United States. As Alberta’s largest export market, trading relationships with the United States are very important. Alberta exports approximately $2 billion worth of forest products, including lumber, pulp, and paper to the American market.Forestry is an important part of a diversified Alberta economy. In addition to 18,000 direct jobs, the sector creates an additional 36,000 jobs through its economic activity. This includes equipment and supply sales, consulting, road building and maintenance, and hospitality. Forestry also supports jobs in homebuilding, construction, transportation and logistics, and environmental sciences.The Alberta Forest Products Association is a private, non-profit industry organization, representing lumber, panelboard, pulp and paper, and secondary manufacturing wood products companies operating in Alberta. AFPA member companies are active participants in sustainability advancements that contribute economic, environmental, and social benefits for Albertans.
Feb. 22, 2017 - B.C. Premier Christy Clark has announced $150 million for the Forest Enhancement Society of British Columbia to plant tens of millions more trees, which will help fight climate change and create more than 3,000 jobs in rural British Columbia.“This is an investment in our forests, in B.C.’s rural communities – and the world’s clean air,” said Clark. “This initiative is another example of how we do business in B.C., striking a balance between environmental protection and economic priorities. That’s the approach that has built Canada’s leading economy, and a world-recognized leader on climate action.”The $150 million will be transferred in the 2016-17 fiscal year as a lump-sum payment to the independent Forest Enhancement Society of British Columbia to advance environmental stewardship and, in particular, focus on reforestation initiatives throughout the province. This is in addition to the $85 million government allocated in 2015-16 to the society.“The rehabilitation and reforestation of damaged forest stands will provide significant greenhouse gas benefits and increase the use of low-quality fibre,” said Jim Snetsinger, vice-chair, Forest Enhancement Society of British Columbia. “The society is pleased to receive this funding and we will work with government agencies, First Nations, forest licensees and stakeholders to achieve these important objectives.”This one-time investment builds on existing programs within the Ministry of Forests, Lands and Natural Resource Operations to support the implementation of the Forest Carbon Initiative. This initiative includes a suite of activities under B.C.’s Climate Leadership Plan, which target the reduction of carbon emissions in the forest sector and the capture of carbon through the restoration of forests damaged by disease and wildfire.“Since 2005, we’ve invested over $445 million in reforestation through Forests for Tomorrow,” said Forests, Lands and Natural Resource Operations Minister Steve Thomson. “Today’s funding will build on those efforts and ensure our children can enjoy the environmental and economic benefits we enjoy from our forests.”
Feb. 17, 2017 - In the midst of the ongoing softwood lumber dispute between Canada and the United States, Ontario's minister of Natural Resources and Forestry has called upon the federal minister of Natural Resources to implement a federal loan guarantee program to help support the forestry industry and the communities that rely on it.Minister Kathryn McGarry brought the proposal forward in a letter to Minister Jim Carr. McGarry says the loan guarantee program "would also ensure that all affected producers are treated equally, as opposed to participating in a variety of provincially based programs."She says that approximately $5 billion worth of duties were forcibly paid by Canadian softwood lumber producers in the last round of trade negotiations.She says Ontario's goal is for Canada as a whole to maintain market access, and to minimalize the blow of impending duties as much as possible on softwood lumber producers. McGarry says it is likely that Canadian softwood lumber producers will be paying taxes imposed by the U.S. government by May 2017.
Feb. 22, 2017 - Conifex Timber Inc. has reported that adjusted EBITDA in the fourth quarter of 2016 increased to a record $9.3 million from $8.5 million in the previous quarter and $7.3 million in the same quarter of 2015. In 2016, adjusted EBITDA was a record $33.6 million, compared to $7.7 million in 2015. In the fourth quarter of 2016, we had net income of $5.1 million, or $0.24 per diluted share, compared to net income of $1.4 million or $0.07 per diluted share in the previous quarter, and a net loss of $0.3 million or $0.01 per share in the fourth quarter of 2015. Current quarter operating and net income included proceeds from the settlement of our business interruption insurance claim of $2.5 million. In 2016, our net income was a record $70.2 million, or $3.32 per diluted share, compared to a net loss of $17.3 million, or $0.82 per share, in 2015. Net income in 2016 included unusual or non-recurring items totaling $63.8 million. Fourth Quarter 2016 Overview Revenues were $102.0 million in the fourth quarter of 2016, $104.1 million in the previous quarter and $100.5 million in the fourth quarter of 2015. Compared to the previous quarter, a decline in lumber segment revenues of 5 per cent was partially offset by increased revenues from electricity sales, which accounted for 7 per cent of total revenues for the quarter. We recorded operating earnings of $6.7 million in the fourth quarter of 2016 compared to $3.3 million in the previous quarter and $1.6 million in the same quarter last year. Compared to the previous quarter, lumber segment operating results were adversely impacted by lower shipment and production volumes and higher unit log costs and cash conversion costs. Bioenergy segment operating earnings increased by $5.7 million and included income from the settlement of our business interruption insurance claim of $2.5 million. Net income for the current quarter was $5.1 million or $0.24 per diluted share. We recorded net income of $1.4 million or $0.07 per diluted share in the previous quarter and a net loss of $0.3 million or $0.01 per share in the fourth quarter of 2015. Adjusted EBITDA was $9.3 million for the fourth quarter of 2016, $8.5 million in the previous quarter and $7.3 million for the fourth quarter of 2015. Lumber Segment Compared to the previous quarter, a modest decline in U.S. dollar-denominated WSPF #2 and Btr prices was more than offset by a weaker Canadian currency and resulted in a 1 per cent or $3 per thousand board feet increase in average Canadian dollar-denominated benchmark lumber prices. Quarter-over-quarter revenues from Conifex produced lumber were 3 per cent lower and largely reflected a reduction in shipment volumes of 6 per cent offset by a 3 per cent increase in unit sales realizations. Although wholesale lumber shipments increased by 4 per cent, wholesale lumber revenues declined by 6 per cent due to shipments of a lower value product mix. Production volumes of approximately 119 million board feet during the fourth quarter of 2016 were 13 per cent lower than the previous quarter. The lower operating rates were mainly attributable to a reduction in operating hours during the holiday season and additional planned downtime taken at the Mackenzie sawmill for capital upgrades. An increase in unit log costs of 7 per cent during the current quarter was primarily attributable to higher market based stumpage and purchased log costs. An increase in unit cash conversion costs of 12 per cent in the current quarter largely reflected lower operating rates. Compared to the fourth quarter of 2015, U.S. dollar-denominated WSPF #2 and Btr prices increased by 20 per cent, while the Canadian currency was relatively flat. Average Canadian dollar-denominated benchmark lumber prices increased by 19 per cent, or $68 per thousand board feet. Quarter-over-quarter revenues from Conifex produced lumber were 5 per cent higher, and mostly reflected a 17 per cent increase in unit sales realizations, partially offset by an 11 per cent reduction in shipment volumes. An increase in wholesale lumber revenues of 3 per cent was generally attributable to higher shipment volumes. Due to our fiscal accounting periods, there were five less operating days in the fourth quarter of 2016 than in the fourth quarter of 2015. Operating rates in the current quarter were lower by 9 per cent as production was further hampered by downtime taken at the Mackenzie sawmill for capital upgrades and, to a lesser extent, weather related production inefficiencies. Unit log costs increased by 11 per cent and cash conversion costs increased by 9 per cent quarter over quarter. Lumber segment operating income was $2.9 million in the fourth quarter of 2016 compared to $5.6 million in the previous quarter and $0.5 million in the same quarter last year. Bioenergy Segment Our power generation plant at Mackenzie, B.C. (the "Mackenzie Plant") commenced commercial operations in May 2015 and its results are reported in our bioenergy segment. The Mackenzie Plant sold 53.0 GWh of electricity under the EPA in the fourth quarter of 2016, which represented an increase of 41 per cent over the previous quarter and a modest decline from the fourth quarter of 2015. The plant achieved 97 per cent of targeted operating rates in the current quarter compared to 70 per cent and 98 per cent, respectively, in the previous quarter and the fourth quarter of 2015. Production in the third quarter of 2016 was hampered by maintenance downtime taken to effect certain operating improvements. The fourth quarter of 2016 had five fewer operating days than the same quarter last year. The effective power rate is the highest during the first and fourth quarters of each year. Revenues from electricity sales were $7.6 million in the fourth quarter of 2016, $4.9 million in the previous quarter and $7.8 million in the fourth quarter of 2015. Operating costs in the fourth quarter of 2016 were $4.9 million, including depreciation expense of $1.6 million. Unit cash operating costs improved by approximately 8 per cent compared to the same quarter last year. Normalized bioenergy segment operating income was $2.7 million in the fourth quarter of 2016 and $2.4 million in the fourth quarter of 2015. Interest on the power project term loan was $1.2 million. Adjusted EBITDA was $4.4 million and the adjusted EBITDA margin was 57 per cent, compared to $4.1 million and 52 per cent, respectively, in the fourth quarter of 2015. Year Ended December 31, 2016 Revenues were $409.3 million in 2016 compared to $353.5 million in 2015. The 14 per cent growth in lumber segment revenues reflected increased shipment volumes of Conifex produced and wholesale lumber, stronger benchmark lumber prices and a weaker Canadian currency. Bioenergy segment revenues, which commenced in May 2015, increased by 55 per cent and accounted for 6 per cent of our total revenues for the year. We recorded operating income of $18.2 million in 2016 compared to an operating loss of $11.6 million in 2015. An improvement in year-over-year lumber segment operating results of $23.8 million was primarily due to higher sales realizations, operating rates and shipment volumes, and to a lesser extent, reductions in unit log costs and cash conversion costs. Bioenergy segment operating earnings were $9.0 million in 2016 and included income from settlement of our business interruption insurance claim of $2.5 million. The bioenergy segment contributed operating earnings of $2.1 million last year. Net income for the year ended December 31, 2016 was a record $70.2 million or $3.32 per diluted share compared to a net loss of $17.3 million or $0.82 per share for the prior year. Unusual or non-recurring items recorded in the current year totaled $63.8 million and were comprised of a gain on sale of assets of $48.0 million, a net gain on revaluation of certain assets of $13.3 million, and income from settlement of our business interruption insurance claim of $2.5 million. Net income was adversely impacted by a negative variance in foreign exchange translation loss of $3.8 million. There was no income tax expense recorded in 2016 due to the utilization of operating loss carry forwards from prior years. Adjusted EBITDA, which excludes the unusual or non-recurring items, was $33.6 million for 2016 and $7.7 million in 2015. Liquidity and Capital Resources In addition to our continued focus on operational improvements and targeted capital expenditures, we completed a number of initiatives in 2016 to strengthen our balance sheet, lower borrowing costs and improve liquidity. Our net debt to capitalization ratio was 38 per cent at December 31, 2016 compared to 60 per cent at the end of 2015. Net debt at December 31, 2016 was $49.4 million lower than at December 31, 2015 due primarily to improved cash flow generated from operations and proceeds received from asset disposals and the settlement of our insurance claim. Our net debt to capitalization ratio, excluding borrowings for our power subsidiary that are non-recourse to our other operations, was 16 per cent at December 31, 2016 compared to 26 per cent at December 31, 2015. Total liquidity comprised unrestricted cash and available credit under our revolving credit facilities. At December 31, 2016, we had total liquidity of $22.3 million, compared to $22.6 million at the end of 2015. Subsequent to the year end, in January 2017, we completed our previously announced $130 million secured revolving credit facility (the "Facility") with a syndicate of institutional lenders. The Facility is available for a term of 5 years and is secured by substantially all of Conifex's assets (excluding the bioenergy segment assets). After giving effect to the financing, our total liquidity was approximately $84.5 million. Market Outlook Looking ahead in 2017, we expect the U.S. market to continue its gradual recovery in both the housing and repair and remodelling sectors. We agree with forecasts calling for an approximate 7 per cent increase in North American lumber consumption, and expect benchmark prices to increase to reflect strengthening softwood lumber demand and to somewhat correlate with the imposition of any countervailing and / or anti-dumping duties or other trade sanctions. The extent to which the anticipated increase in U.S. housing demand translates into higher selling prices will also be influenced by supply side responses from Canadian and other suppliers into the U.S. market. The uncertainty related to the timing and magnitude of anticipated trade sanctions may increase market volatility. We expect our sales volume to China and Japan will remain steady and intend to continue to develop sales into other export markets. In the lumber segment, we continue to remain focused on a number of initiatives to enhance operations and cash flow, including cost management and productivity improvements from affordable, high-return capital projects. We expect operating rates to remain somewhat muted in the first quarter of 2017 due to the expected ramp up period associated with the installation of a significant capital upgrade at Mackenzie in December 2016. Accordingly, we also expect shipment volumes to be somewhat hampered by lower production volumes and potential constraints on the external supply chain. Overall in 2017, we expect higher log costs and modest improvements in unit cash conversion costs and grade outturns. We will continue to work towards optimizing performance of the Mackenzie Plant and expect improved operating results from higher electricity deliveries and further unit cost reductions.
Feb. 22, 2017 - Acadian Timber Corp. has reported financial and operating results for the year ended Dec. 31, 2016. Acadian maintained its momentum and posted another year of strong results, generating Free Cash Flow of $19.4 million resulting in a payout ratio of 86 per cent, comfortably below our target level of 95 per cent. "Acadian posted another year of strong performance and we believe we are well positioned to maintain this momentum in 2017. Our operations continue to perform very well in the current market environment and we maintain a strong balance sheet," commented Mark Bishop, chief executive officer of Acadian. "We have a positive outlook for the coming year, and we are pleased to announce that our Board of Directors has approved a 10 per cent increase in Acadian's annual dividend." Adjusted EBITDA for the year was $22.5 million. Although Adjusted EBITDA was down year-over-year, our operations continued to benefit from steady demand and strong pricing in New Brunswick. The decline was primarily due to relatively weak softwood pulpwood markets in Maine and a reduction in New Brunswick hardwood harvest levels consistent with our long term forest management plan. For 2016, we paid a dividend to shareholders of $1.00 per share or 8 per cent of Free Cash Flow, which is below our long-term target of 95 per cent. Based on our expectation of continued strong performance and supported by our strong liquidity, Acadian's Board of Directors approved a 10 per cent increase in Acadian's annual dividend to $1.10 per share effective in the first quarter of 2017. Acadian generated net sales of $77 million in the year ended Dec. 31, 2016, a decrease of $7 million compared to the prior year. We saw continued strength in pricing for most of our non-biomass product with the exception of softwood pulp, driving a 1 per cent increase in the weighted average log selling price year-over-year, led by an ~5 per cent increase in our average realized price for hardwood products. However, strength in log selling prices in the New Brunswick market was more than offset by a 9 per cent decrease in log sales volumes due primarily to our planned reduction in hardwood harvest levels under Acadian's forest management plan. In addition, the harvest of certain softwood species was impacted by less favourable year-over-year operability. Adjusted EBITDA for the year was $22.5 million, compared to $26.4 million in 2015, driven primarily by the above noted decrease in net sales. Adjusted EBITDA margin of 29 per cent for 2016 was slightly below 2015 levels, as longer average haul distances combined with a lower margin sales mix offset the above noted increase in average realized log selling price. Net income for the year totaled $16.1 million, or $0.96 per share, compared to $13.6 million, or $0.82 per share in 2015. The increase is primarily a result of a significant unrealized foreign exchange loss on long term debt which impacted the year ended December 31, 2015.New Brunswick Timberlands Net sales for the year totaled $56.5 million compared to $60.7 million in 2015. This decrease reflects a 2 per cent increase in the weighted average log selling price, offset by a 9 per cent decrease in log sales volumes. Log sales volumes declined in 2016 to 721 thousand m3 from 791 thousand m3 in 2015, due primarily to a planned reduction in hardwood harvest volumes under Acadian's new forest management plan. In addition, volumes were impacted by less favourable harvest conditions for pine and cedar stands. The weighted average log selling price was $67.03 per m3 in 2016, up from $65.49 per m3 in 2015, due primarily to more favourable pricing for hardwood products. Adjusted EBITDA for the year was $19.3 million, compared to $20.3 million in 2015, due primarily to the aforementioned decrease in log sales volumes. Costs were $37.2 million, compared to $40.4 million in 2015, due to lower log sales volumes and flat variable costs per m3. Adjusted EBITDA margin increased to 34 per cent in 2016 from 33 per cent in 2015, driven by an increase in the weighted average log selling price while variable costs remained flat. Maine Timberlands Net sales for the year totaled $20.6 million compared to $23.8 million in 2015, with the decline resulting from an 11 per cent decrease in log sales volumes. This decrease is due primarily to a 12 per cent decline in softwood sales volume as local markets have been challenged by weak demand for softwood residuals. The weighted average log selling price in Canadian dollar terms was $78.61 per m3 in 2016, a decrease from $80.70 per m3 in 2015. In U.S. dollar terms, the weighted average log selling price was $58.84 per m3, a decrease of 7 per cent year-over-year, due primarily to continued weakness in softwood pulp pricing. Adjusted EBITDA for the year was $4.3 million, compared to $7.6 million in 2015, due primarily to the aforementioned decrease in sales volumes. Costs for the year were $16.3 million, compared to $16.2 million in 2015, due primarily to higher variable cost per m3, resulting from greater hauling distances for hardwood products and an unfavourable sales mix. Variable costs per m3 increased 11 per cent in Canadian dollar terms and 6 per cent in U.S. dollar terms, respectively, year-over-year. Adjusted EBITDA margin decreased to 21 per cent this year, from 32 per cent in 2015, due to the above noted decrease in log pricing and increase in variable costs per m3. Market Outlook The U.S. economy appears to have started the new year with strong momentum on the basis of robust job growth and rising wages. Housing starts would appear positioned for continued growth owing to a combination of improving employment opportunities, and the release of pent-up demand. However, shortages of skilled labour and finished lot availability remain as potential constraints. Further, potential successive rate increases and a more protectionist U.S. trade stance both remain as downside risks to housing affordability. Nevertheless, current consensus expectations still call for healthy year-over-year improvements in total housing starts for each of 2017 and 2018 of about 6-7 per cent. Industry forecasters predict that North American sawtimber demand will grow at over 3 per cent per year over the next few years to support expanding domestic construction needs. Despite the expectation for steadily improving U.S. lumber consumption, the lumber pricing environment for 2017 remains uncertain following the recent U.S. ITC injury determination which is widely expected to result in preliminary application of countervailing duties in late spring and anti-dumping duties by early summer. As in past disputes, we would anticipate relatively high initial duties, which will be reduced over time during the litigation period. However, we anticipate a highly politicized process may obscure visibility on progress towards a negotiated settlement for at least most of 2017. During the prior U.S./Canada softwood lumber dispute, Canada's Atlantic lumber producers and Québec border mills experienced lower relative duties than the rest of Canada and we continue to believe treatment of these producers during the current dispute should be materially the same as in the past. This differential treatment is due to the significantly greater proportion of private timberlands in the Atlantic region relative to the rest of Canada as well as a long history of active cross-border log exports within the Northeast region. Acadian's key markets include softwood sawtimber, hardwood sawtimber and hardwood pulpwood. While we anticipate softwood sawtimber markets will remain well balanced through the year, greater volatility in this market should be expected as the softwood dispute plays out. While continued oversupply of softwood sawmill residuals and softwood pulpwood markets remains a concern, we anticipate regional timberland owners will aggressively manage pulpwood harvest levels through 2017. Hardwood sawtimber markets, typically oriented to millwork and higher value specialty markets are expected to remain at healthy current levels through the upcoming year. Hardwood pulpwood, increasingly consumed by tissue and other non-publishing paper end uses, also remains in good balance, but historically very strong prices may be somewhat vulnerable in a strengthening U.S. dollar environment. Biomass is also an important market for Acadian. We anticipate domestic biomass markets to remain stable in New Brunswick and anticipate improved potential for a gradual recovery of export volumes through the year. Maine's biomass market appears positioned for at least a modest recovery following a challenging 2016, as state subsidies have now permitted three previously idled biomass generation facilities to restart. Additionally, potential for sustained higher natural gas prices may be a catalyst for a shift back to biomass consumption for regional cogeneration capacity. Quarterly Dividend Acadian is pleased to announce a dividend of $0.275 per share, payable on April 14, 2017 to shareholders of record on March 31, 2017. Acadian Timber Corp. is a leading supplier of primary forest products in Eastern Canada and the Northeastern U.S. With a total of 2.4 million acres of land under management, Acadian is the third largest timberland operator in New Brunswick and Maine.
Feb. 22, 2017 - The U.S. lumber markets are already seeing some major price volatility, where W-SPF lumber prices soared by a whopping 25 per cent (US$78/Mbf) in the three-week period between Jan. 27 and Feb. 17, 2017 and up US$83/Mbf over the previous five-week period.This three-week price increase in U.S. lumber prices is one of the largest short-term gains over the past 20 years. This is mirroring a similar scenario back in early 2001 when countervailing duties (CVD) on Canadian lumber shipments into the U.S. moved into their 90-day retroactive period in mid-May 2001 and the anti-dumping duties (ADD) followed later. The initial combined duties of 32.3 per cent were both in effect in November 2001.The largest U.S. lumber price spike ever, based on price changes in consecutive weeks, was in 2001 – before the implementation of the last U.S. duties – when lumber prices spiked higher by US$165/Mbf over a 7-week period. This was followed by two major price collapses over the next six months: one over five weeks for a drop of US$111/Mbf; and a second over 9 weeks for US$122/Mbf (details are provided in this month’s WOOD Markets Monthly Report). Understanding the possible scenarios and implications of U.S. export duties on Canadian lumber shipments to the U.S., before and after duties are implemented, are critical factors to consider and understand for all players throughout the lumber supply chain.
Feb. 17, 2017 - West Fraser reported earnings of $79 million or $1.01 basic earnings per share on sales of $1,107 million in the fourth quarter of 2016 and earnings of $326 million or $4.06 basic earnings per share on sales of $4,450 million for 2016. These results compare with previous periods.Adjusted EBITDA, Adjusted earnings and Adjusted basic EPS as described in this News Release reflect the adjustments described in the tables referred to in the section titled "Non‑IFRS Measures" of our 2016 Management's Discussion & Analysis.Operational ResultsIn the quarter our lumber operations generated operating earnings of $107 million (Q3-16 –$114 million) and Adjusted EBITDA of $144 million (Q3-16 - $151 million). Production and shipments declined quarter over quarter due to cold weather in several of our operating areas and fewer operating days. The segment's results benefited from a weaker Canadian dollar while Canadian log costs continued to rise.Our panels segment, which includes plywood, LVL and MDF, generated operating earnings in the quarter of $17 million (Q3-16 - $30 million) and Adjusted EBITDA of $20 million (Q3-16 - $33 million). The major contributor to the decline was plywood pricing as winter weather slowed Canadian construction.Our pulp & paper segment generated operating earnings of $20 million (Q3-16 – $22 million) and Adjusted EBITDA of $30 million (Q3-16 - $31 million). NBSK operations were able to offset additional costs associated with cold weather with higher shipments while BCTMP price improvements offset reduced shipments caused by port congestion.OutlookOur president and CEO Ted Seraphim said: "During 2016 we faced a number of challenges and, although we still have important work to do, I have been greatly encouraged by the progress that we have made across the Company in achieving operational excellence. This will continue to be our focus in the coming years as it is the critical component of our business over which we have control. I'm grateful to our many employees whose commitment to this standard of excellence is evident in their daily activities."Mr. Seraphim also commented on the current softwood lumber dispute: "In light of the operational progress that we are making as a company, it is particularly disappointing that we find ourselves once again caught up in another dispute with our American neighbours over softwood lumber exports from Canada to the U.S. West Fraser has worked hard to contribute to a resolution of this long‑standing dispute, as have various levels of government in Canada and other Canadian industry participants. West Fraser was recently selected by the U.S. Department of Commerce as a mandatory respondent in separate subsidy and dumping investigations which has imposed substantial time commitments and costs on us. Despite this we continue to support a negotiated settlement that will manage trade in a fair and reasonable manner but, as always, we would prefer no agreement to a bad agreement."
Feb. 16, 2017 - Housing starts returned to trend, dropping 2.6 per cent to a seasonally adjusted annual rate of 1.246 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Multifamily production fell 10.2 per cent to 423,000 units after an unusually high December 2016 reading, whereas single-family starts ticked up 1.9 per cent to 823,000 units. "A settling of housing production is in line with what we are hearing from builders -- that they are largely optimistic about current market conditions but still face supply-side headwinds and regulatory hurdles," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. "Some pull back in housing production is unsurprising after an overly strong multifamily reading last month," said NAHB Chief Economist Robert Dietz. "As we move forward in 2017, we can expect the multifamily sector to continue to stabilize and single-family production to move forward at a gradual but consistent pace." Regionally in January, combined single- and multifamily housing production rose 55.4 per cent in the Northeast and 20 per cent in the South. Starts fell by 17.9 per cent in the Midwest and 41.3 per cent in the West. Overall permit issuance rose 4.6 per cent in January to 1.285 million units. Single-family permits fell 2.7 per cent to 808,000 units. Meanwhile, multifamily permits increased 19.8 per cent to 477,000 units. Regionally, permits rose 29.6 per cent in the Northeast, 9.9 per cent in the South and 5.3 per cent in the Midwest. The West registered a decline of 13.2 per cent.
Feb. 15, 2017 - Brazil’s pulp sector has for over two decades had some of the lowest wood fibre costs in the world, making the industry highly competitive, reports the Wood Resource Quarterly. The low production costs have resulted in major investments in pulp production capacity with a majority of the pulp being exported overseas, predominantly to China. The export market for pulp produced in Brazil has become increasingly important for the pulp sector with the export share of domestic production having gone up from 55 per cent in 2007 to almost 70 per cent in 2016. Pulp export volumes have expanded in an impressive fashion over the past two decades, with increased year-over-year shipments for 19 of the past 20 years. This trend continued in 2016, with export volumes likely to reach almost 13 million tons, an increase of about 11 per cent from 2015, reports the Wood Resource Quarterly. Not surprisingly, China’s steady increase in demand for pulp the past decade has been the key driver to Brazil’s pulp export success story. Over one-third of Brazil’s exports were destined for China this year, up from 23 per cent five years ago. Brazil has become the second largest producer of wood-based pulp in the world behind the US, having surpassed Canada in 2016. The driving factors have been a combination of low wood fibre costs, a dramatically weakening Brazilian Real, and a steady increase in demand in particular for hardwood market pulp in China. Over the past three years, wood fibre costs in Brazil have been approximately 60per cent of the manufacturing costs, according to Fisher International. The high cost share for wood fibre, together with being one the lowest-cost pulpwood regions of the world, has made Brazil’s pulp industry a very competitive pulp producer for many of the past 25 years. In US dollar terms, Eucalyptus pulplog prices have fallen from a record-high in the 3Q/11 to a 12-year low in the 4Q/15. Since the end of 2015, wood fibre prices have gone up but are still substantially below their ten-year average, as reported by the WRQ (www.woodprices.com). The past two decades have not only been mostly good news for the pulp industry in Brazil, but also for timberland owners measuring their financial results in the Brazilian Real (BRL). In 2016, eucalyptus pulplog prices reached their highest level on record since WRQ started tracking pulplog prices in Brazil over 20 years ago. Current prices are about five per cent higher than one year ago in the local currency, and 23per cent above the average price two years ago. Global lumber, sawlog, and pulpwood market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report, which was established in 1988 and has subscribers in over 30 countries, tracks sawlog, pulpwood, wood chip, lumber and pellet prices, trade, and market developments in most key regions around the world. To subscribe to the WRQ, please go to www.woodprices.com
Feb. 22, 2017 - Amidst ongoing negotiations for a new softwood lumber agreement between Canada and the United States, the Canadian government has announced a task force on softwood lumber. The task force will ensure communication between the federal government and all provinces and territories to ensure needs are being met via information-sharing and analysis. Canada’s Minister of Natural Resources Jim Carr made the announcement Wednesday. "Canada's forest and natural resource sectors are vital to employment in communities across the country,” he said in a statement. “This new task force will work together to strengthen the long-term success of the forest sector through innovation and diversifying markets for Canadian forest products.” Minister Carr will take charge of the domestic task force while Canada’s Minister of Foreign Affairs, Chrystia Freeland continues talks with the U.S. The 2006 Canada-U.S. Softwood Lumber Agreement expired on Oct. 12, 2015. Since then, the proverbial flame under Canada and the U.S. regarding softwood lumber was re-ignited in November 2016 after the U.S. Lumber Coalition filed a petition against the Canadian government, citing unfair subsidies are being provided by the Canadian government for Canadian producers. It also called for taxes to be imposed on Canadian producers as a result. "Softwood lumber is a priority for our government. We are committed to promoting and vigorously defending the interests of workers and producers from across Canada,” Minister Freeland said in a statement. “My colleagues and I will continue to work very closely with the softwood industry, its workers, the provinces and territories." According to a statement from Natural Resources Canada the end-goal for the softwood negotiations is to create stability and predictability on both sides of the border for all lumber producers. “The government will continue to work closely with provinces, territories and the softwood lumber industry to vigorously defend the interests of the middle-class Canadians who depend on the industry. This work will continue outside of the task force,” the statement read. “The new Federal–Provincial Task Force on Softwood Lumber will assess current federal and provincial programming and ensure coordination of government initiatives to promote innovation, market diversification and transformation of the forest sector.” According to Natural Resources Canada, the country’s forest industry directly employs more than 200,000 people nationwide. And nearly 70 per cent of Canada’s $8.6 billion worth of softwood lumber exports in 2015 were sent to the U.S. Minister Carr announces creation of a federal-provincial task force on #Softwood #Lumber https://t.co/RLRgAHpj4u — Natural Resources (@NRCan) February 22, 2017
Dec. 13, 2016 - As the prime minister met with premiers from across the country Dec. 9 on the issue of climate change, the Forest Products Association of Canada (FPAC) called for strong leadership and smart policies so the forest sector can do its part to support the transition to a low carbon economy. Earlier this year FPAC announced its 30 by 30 Climate Change Challenge where it pledged to cut 30 megatonnes of greenhouse gases a year by 2030, about 13 per cent of the federal government’s overall climate change target. To reach that goal, FPAC would like to see provinces allocate all revenue generated by a price on carbon to a technology fund made available to industry to support further greening of operations. FPAC would also like to call on the federal and provincial governments to join the global movement to building more with wood as a way to reduce GHG emissions by replacing materials made from fossil fuels. “We agree that putting a price on pollution can be a win for both the environment and the economy,” says the CEO of FPAC, Derek Nighbor. “The forest products industry has pledged to do more than any other sector in the country to tackle climate change. With smart government policy, we can do this while still supporting forest communities and the nearly one million families who rely on forestry for their livelihoods.” Nighbor notes that FPAC has also signed on to two important initiatives: an open letter from more than 60 CEOs and civil society leaders urging the first minister to take bold action on clean growth and climate change as well as the Clean Growth Century Initiative that says Canada can tackle climate change through innovation. As part of its pre-budget submission, FPAC has been asking for a renewed partnership with government to support innovation by de-risking the commercialization of new innovative green products and processes that could help reduce greenhouse gas emissions. The Canadian forest products industry has also been increasing its production of renewable electricity from biomass residue – the sector now produces enough green electricity to power the city of Calgary. With government support for clean technology, FPAC believes the sector can increase its amount of renewable electricity generated in Canada. “The forest sector appreciates the leadership role that governments in Canada are now taking to tackle climate change,” Nighbor says. “We are uniquely positioned as a willing and able partner to drive real climate change results for Canada.” FPAC provides a voice for Canada’s wood, pulp, and paper producers nationally and internationally in government, trade, and environmental affairs. The $65-billion-a-year forest products industry represents 2 per cent of Canada’s GDP and is one of Canada’s largest employers operating in hundreds of communities and providing 230,000 direct jobs across the country.
Dec. 13, 2016 – Ontario’s finance committee will hold a hearing Tuesday to consider ideas for funding the province’s forestry sector. The hearing, in Sudbury, is meant to be a pre-budget consultation regarding the federal finance committee’s pre-budget recommendations for Canada’s forestry sector. The federal committee released its pre-budget recommendations on Dec. 7, with a section on funding for Canada’s forest industry. Tuesday’s meeting will include a presentation from the Ontario Forest Industries Association (OFIA)with ideas on how to best use Ontario’s wood, create new jobs that can improve the economy, and apply more environmentally efficient practices. “Growing Ontario’s forestry community and recognizing its vital role in climate change mitigation is crucial in maintaining the opportunities in forestry that create jobs and foster economic growth in northern and rural Ontario,” said the OFIA’s president and CEO, Jamie Lim in a statement. “Ontario’s forestry community generates $11 billion of economic activity. Last year, manufactured forest product sales increased by more than $1 billion over the year before, and our exports of forest products have increased each year since 2012,” Lim stated.
Dec. 12, 2016 - The federal finance committee discussed helping Canada’s forest sector through funding to support wood products use, climate change adaptation, fibre supply and perhaps SLA relief. The recommendations were released Wednesday in a pre-budget report. The Forest Products Association of Canada (FPAC) and Alberta-Pacific Forest Industries Inc. (Al-Pac) informed the committee about the funding needed in the forestry sector. The committee issued its recommendations to the federal government to support those needs. The recommendation states that the Government of Canada should strengthen its commitment to the country’s forestry sector by supporting manufacturing, innovation and promotion of forestry products; ensuring the stability of wood supply; supporting investments that can improve competitiveness and address the climate change agenda; and explore possible support measures for Canadian softwood lumber producers if the U.S. government decides to impose taxes on lumber exports from Canada to the U.S. According to FPAC, “nine jobs are created for every million dollars in value add in the forest industry.” “We are pleased that the committee has recognized the need for an ongoing partnership between the federal government and the forest sector,” FPAC CEO Derek Nighbor said in a statement. “Almost a million families across Canada depend on our industry for their economic wellbeing. I look forward to working with the federal government to help implement these committee recommendations,” he said. The recommendations for the forest industry are included in a list of 81 overall recommendations by FINA, aimed at improving Canada’s economy via funding for various businesses and communities. @FPAC_APFC cheers as Gov of Canada strengthens commitment to forest sector https://t.co/ZcNIqygcGk pic.twitter.com/DKJs4Gl9xv — Heidi & Sandy (@TreeFrogNews) December 9, 2016 RELATED: FPAC calls for formal federal partnership
Sept. 15, 2016 - While the rise of protectionism dominated the discussions among world leaders during the latest G20 summit, a Viewpoint published today by the Montreal Economic Institute (MEI) shows among other things that the tariff barriers imposed on Canadian softwood lumber threaten nearly 22,000 jobs throughout the country.
Sept. 14, 2016 - A forester in Nova Scotia with more than 30 years of experience in the industry says the provincial government needs a long-term plan for forestry.
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