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June 18, 2018 - Builder confidence in the market for newly-built single-family homes fell two points to 68 in June on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The decline was due in large part to sharply elevated lumber prices, although sentiment remains on solid footing.

"Builders are optimistic about housing market conditions as consumer demand continues to grow," said NAHB chairman Randy Noel, a custom home builder from LaPlace, La. "However, builders are increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability. Record-high lumber prices have added nearly $9,000 to the price of a new single-family home since January 2017."

"Improved economic growth, continued job creation and solid housing demand should spur additional single-family construction in the months ahead," said NAHB chief economist Robert Dietz. "However, builders do need access to lumber and other construction materials at reasonable costs in order to provide homes at competitive price points, particularly for the entry-level market where inventory is most needed."

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI indexes inched down a single point in June. The index measuring current sales conditions fell to 75, the component gauging expectations in the next six months dropped to 76, and the metric charting buyer traffic edged down to 50.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose two points to 57 while the West and Midwest remained unchanged at 76 and 65, respectively. The South fell one point to 71.



Editor's Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.
June 14, 2018 - Millar Western Forest Products Ltd. announced that it has entered into an underwriting agreement to issue and sell C$150 million principal amount of 9.50 per cent Senior Secured First Lien Notes due 2023 by way of a private placement offering. Subject to satisfaction of customary closing conditions, the offering is expected to close on June 20, 2018. 
June 12, 2018 - West Fraser Timber Co. Ltd. announced that the Toronto Stock Exchange (TSX) has accepted a notice filed by the company of its intention to amend its current normal course issuer bid (NCIB) to purchase up to an additional 2,196,079 of its common shares.

The amended TSX notice authorizes the company to, during the 12 month period commencing Sept. 19, 2017 and ending Sept. 18, 2018, purchase up to 5,990,454 common shares of the company representing 10 per cent of the public float as at Sept. 12, 2017. Under its current NCIB, as of June 11, 2018, the company has purchased 2,061,389 common shares at an average price of $88.99 per common share, resulting in 3,929,065 common shares remaining available for purchase under the amended NCIB.

All shares will be purchased either on the open market through the facilities of the TSX or through other Canadian marketplaces, and payment for the shares will be made in accordance with TSX policies. The price paid for the shares will be the market price at the time of purchase. No purchases will be made other than by means of open market transactions during the term of the NCIB. The shares purchased by the company will be cancelled.

Pursuant to TSX policies, the daily purchases will not exceed 71,128 Common shares, representing 25 per cent of the average daily trading volume of 284,514 common shares, except where such purchases are made in accordance with "block purchases" exemptions under applicable TSX policies.

West Fraser has also entered into a new automatic share purchase plan pursuant to which the securities dealer acting as the company's agent for the NCIB may acquire, at its discretion, common shares of West Fraser on West Fraser's behalf commencing June 14, 2018 to the expiry of the quarterly blackout period of the company for its second quarter 2018 results ending at the end of July 23, 2018, subject to certain parameters as to price and number of shares.

Dividend declared
The Board of Directors of the company has declared a dividend of $0.15 per share on the common shares and the Class B Common shares in the capital of the company, payable on July 18, 2018 to shareholders of record on June 27, 2018.

Dividends are designated to be eligible dividends pursuant to subsection 89(14) of the Income Tax Act (Canada) and any applicable provincial legislation pertaining to eligible dividends.
May 18, 2018 - Cargotec has signed an agreement with JCE Invest AB to establish a joint venture, Bruks Siwertell Group, specialised in dry bulk handling. The new joint venture will own Siwertell AB (previously part of Kalmar Business Area within Cargotec) and BRUKS Holding AB (previously part of JCE Group).
May 17, 2018 - Total housing production fell 3.7 per cent in April to a seasonally adjusted annual rate of 1.29 million units after an upwardly revised March reading of 1.34 million, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. The March report marked an 11-year high for housing production.
May 16, 2018 - Conifex Timber Inc. (Conifex) has announced that it has reached an agreement with BW SLC Holdings, LLC (BW SLC), an affiliate of Blue Wolf Capital Partners LLC (Blue Wolf) and the minority shareholders of Caddo River Forest Products, LLC to purchase all of the outstanding membership interests of Suwannee Lumber Holding Company, LLC, Suwannee Timber Management, LLC and Caddo River Forest Products, LLC (collectively, the "BW Group"). 

The BW Group owns the Suwannee sawmill in Cross City, Fla., and the Caddo River sawmill in Glenwood, Ark., which both primarily produce Southern Yellow Pine (SYP) softwood lumber and specialty products like decking. The Suwannee Mill and Caddo River Mill each have an annual dimension lumber capacity of approximately 185 million board feet on a two-shift basis. 

As a result of this transaction, Conifex's annual lumber production capacity will increase by approximately 50 per cent to 1.1 billion board feet while its dimension lumber platform in the Southern U.S. will increase by 200 per cent to approximately 550 million board feet, representing approximately 50 per cent of the company's total pro forma lumber capacity. 

Further, the acquired mills add premium priced SYP decking products to our current product mix, along with long established customer relationships in Florida and the Southern and Eastern U.S.

Both the Suwannee Mill and Caddo River Mill have had significant modernization projects completed in recent years. Most recently, a US$12 million modernization and optimization project was completed at the Suwannee Mill in 2017 and approximately US$14 million of capital expenditures were completed at the Caddo River Mill in connection with its re-start in May 2017.

In the first quarter of 2018 and for the full year in 2017, the BW Group generated Adjusted EBITDA of US$5.5 million and US$14.0 million, respectively, on sales of US$32.6 million and US$101.1 million, respectively.

Conifex estimates that integrating the acquired mills with its existing operations will generate over US$5 million in synergies through procurement opportunities, cost benefits, customer service rationalization, and providing business support services to an expanded number of mill locations. Conifex believes these annual run-rate benefits will be achieved within 12 months of closing the transaction. 

In a statement from Conifex president and chief executive officer Ken Shields, he said:

"This is a highly strategic and transformative transaction for Conifex. It brings together two successful growth oriented companies to create a leading SYP lumber producer.

The Suwannee and Caddo River mills significantly increase our presence in the U.S. South, which we have identified as an important strategic area with proximity to high-quality and abundant fibre supply in addition to some of North America's fastest growing population centres and housing markets.

The Suwannee and Caddo River mills' culture and operations provide an ideal fit to increase our profitability and provide a launching pad to scale our business and compete with the best sawmills in North America.

We are also well positioned to realize upon the ramp up in production at the Caddo River mill and our El Dorado mill during the balance of 2018 and next year.

The transaction positions us to capitalize on the continued recovery in the U.S. and, along with our current operations create a platform for growth and enhance returns for our stakeholders.

We look forward to welcoming all Suwannee and Caddo River employees to the Conifex family."

"After many years of investing in the sawmill industry in the Southeastern U.S., we are excited to join forces with the Conifex team, whose values and commitment to their employees, communities, and customers parallel our own," a partner of Blue Wolf Charles P. Miller said. "As a result of this transaction we will continue to be significant investors in Conifex and we firmly believe that the scale of our combined companies will make all of the mills in the system stronger, more competitive, and better able to continue a culture of investment, expansion, and continuous improvement."

Transaction Overview

Conifex's consideration for its acquisition of the BW Group consists of:

  • US$150.0 million plus the net working capital of the BW Group at closing in cash;
  • the value of US$50.0 million through the issuance of common shares of Conifex with an issue price of $6.50 per share (being the 20-day volume weighted average trading price), provided, however, that to the extent that such Common Shares issued to the Vendors would exceed 19.9 per cent of the issued and outstanding Common Shares, the excess amount shall be satisfied in cash; and
  • 3.5 million warrants to purchase Common Shares for a period of five years after closing of the acquisition, at an exercise price of $8.78 per share. 
If any of the foregoing warrants cannot be exercised at the end of the five-year term due to the share cap restriction, then the term of such number of warrants will be extended for an additional one-year.

In addition, Conifex and BW SLC have entered into customary governance provisions including standstill and nomination arrangements and a non-competition agreement.

As part of the transaction, Charles P. Miller and George R. Judd shall be appointed to Conifex's Board of Directors on the closing of the transaction. 

Miller is a partner at Blue Wolf and Judd is a strategic advisor to Blue Wolf and a member of BW SLC’s board. Previously, Judd served as the chief executive officer of PrimeSource Building Products, Inc., one of the largest purveyors of fasteners and distributors of building materials. He also served as the chief executive officer of Snappy Air Distribution Products, Inc. and as president and chief executive officer of BlueLinx Corporation, a large distributor of building products. 

The completion of the transaction is subject to the satisfaction of customary closing conditions, including regulatory consents and approvals and financing.  In connection therewith, Conifex has received from a U.S. bank a commitment for a new credit facility in the amount of US$220 million with a term of five years to partially finance the acquisition, replace its current facility and for general working capital. Conifex is also reviewing other supplemental funding for the acquisition.

Pursuant to the requirements of the Toronto Stock Exchange, the issuance of shares and warrants are subject to Conifex obtaining shareholder approval, and Conifex will convene an annual and special meeting of shareholders to, among other things, consider and approve the transaction.

The transaction is expected to be closed at or around the end of the second quarter of 2018.
May 14, 2018 - Western Forest Products Inc. (Western) reported adjusted EBITDA of $43.0 million in the first quarter of 2018, compared to adjusted EBITDA of $34.0 million in the first quarter of 2017, and $38.9 million reported in the fourth quarter of 2017.
May 4, 2018 - U.S. softwood lumber demand is expected to continue its upward trajectory from the lows of the global financial crisis of 2008-2009, reaching an all-time high by mid 2020s, according to a newly released US Lumber Outlook Study by ForestEdge LLC and Wood Resources International LLC. In the study’s base case scenario, lumber consumption in the end-use category “Non-Residential Construction” is forecasted to grow the fastest and increase its share of softwood lumber consumption from 11 per cent in 2016 to 14 per cent by 2030. However, the biggest end-use market will continue to be the residential housing sector, including repair and remodeling, at a total share of about 70 per cent of the total lumber consumption by 2030.
May 3, 2018 - Resolute Forest Products Inc. has reported net income for the quarter ended March 31, 2018, of $10 million, or $0.11 per share, compared to a net loss of $47 million, or $0.52 per share, in the same period in 2017. Sales were $874 million in the quarter, an increase of $2 million from the first quarter of 2017. Excluding special items, the company reported net income of $17 million, or $0.18 per share, compared to a net loss, excluding special items, of $30 million, or $0.33 per share, in the first quarter of 2017.
May 2, 2018 - In the 4Q/17, the Global Sawlog Price Index (GSPI) rose one per cent from the previous quarter to reach just over $76/m3. This was the fourth consecutive quarter-over-quarter rise, with the GSPI being up 9.8 per cent in one year. Sawlog prices have gone up universally in U.S. dollar terms in 2017, with the biggest growth occurring in Eastern Europe, the Nordic countries and in Western North America, while the price movements have been more modest in the U.S. South, Latin America and Oceania, according to the Wood Resource Quarterly (WRQ).
April 27, 2018 - Weyerhaeuser Company reported first quarter net earnings of $269 million, or 35 cents per diluted share, on net sales of $1.9 billion. This compares with earnings of $157 million, or 21 cents per diluted share, on net sales of $1.7 billion for the same period last year.

April 27, 2018 - West Fraser has announced its 2018 first quarter results.

Highlights:
  • Earnings of $197 million or basic EPS of $2.53
  • Adjusted earnings1 of $231 million or Adjusted basic EPS of $2.98
  • Adjusted EBITDA1 of $379 million or 27.8 per cent of sales
  • Reinvested $104 million through capital expenditure and returned $58 million to shareholders through share buybacks and dividends
  • Transportation challenges were a significant headwind in the quarter
Operational results
Our lumber segment generated operating earnings of $189 million (Q4-17 - $232 million) and Adjusted EBITDA of $282 million (Q4-17 - $258 million). This quarter’s results were unfavorably impacted by severe winter weather, significant transportation challenges and a full quarter of export duties. Both SPF and SYP production were higher than the prior quarter, but SPF production was slightly lower than the prior year.

Our panels segment generated operating earnings in the quarter of $25 million (Q4-17 - $20 million) and Adjusted EBITDA of $28 million (Q4-17 - $24 million). The plywood market was strong throughout the quarter with pricing well ahead of 2017 levels. Plywood shipments were held back by transportation challenges as well.

Our pulp & paper segment generated operating earnings of $58 million (Q4-17 - $48 million) and Adjusted EBITDA of $70 million (Q4-17 - $60 million). The major factors contributing to the increase in operating earnings were higher Canadian dollar pulp prices and an increase in NBSK shipments offset by lower BCTMP shipments, again due to transportation headwinds.

Outlook
"This was a challenging quarter operationally. Weather and transportation challenges were significant headwinds to production and shipments. I also want to congratulate Ray Ferris on taking on the role of president and chief operating officer. I look forward to working even closer with Ray as we continue to build upon the great efforts of all our employees," said Ted Seraphim, chief executive officer.

We will continue to focus on operational improvements which should contribute to growing production in lumber and MDF versus the prior year. In the first quarter, results were adversely affected by transportation service disruptions resulting in a substantial increase in finished good inventory levels. We are uncertain when the backlog of shipments will be cleared and we will likely incur additional storage, freight and other distribution costs. Our pulp mills do not have any scheduled major maintenance shutdowns during the balance of 2018.



West Fraser is a diversified wood products company producing lumber, LVL, MDF, plywood, pulp, newsprint, wood chips and energy with facilities in western Canada and the southern United States.
April 25, 2018 - Canfor Pulp Products Inc. (CPPI) has reported first quarter 2018 results and quarterly dividend.
April 18, 2018 - Gains in multifamily production pushed overall housing starts up 1.9 per cent in March to a seasonally adjusted annual rate of 1.32 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department.

Multifamily production rose 14.4 per cent to a seasonally adjusted annual rate of 452,000 units — its highest reading since December 2016. Meanwhile, single-family starts fell 3.7 per cent to 867,000 units.

"Builders are optimistic about future demand for housing and are ramping up production to meet this demand," said NAHB chairman Randy Noel, a custom home builder from LaPlace, La. "Single-family starts dropped slightly this month, but single-family permits year-to-date are up five per cent from their level over this same period in 2017."

"The modest decline in single-family starts in March is still in line with our solid builder confidence readings and is largely attributable to lingering winter weather that is causing production delays in certain areas of the country," said NAHB chief economist Robert Dietz. "With ongoing job creation, wage increases and rising household formations, we can expect continued, gradual strengthening of the housing market in the coming months."

Regionally in March, combined single- and multifamily housing production increased 22.4 per cent in the Midwest and ticked up 0.8 per cent in the Northeast. Starts inched down 0.6 per cent in the South and 1.5 per cent in the West.

Multifamily strengthening pushed overall permit issuance up 2.5 per cent in March to a seasonally adjusted annual rate of 1.35 million units. Multifamily permits jumped 19 per cent to 514,000 while single-family permits fell 5.5 per cent to 840,000.

Permit issuance rose 9.0 per cent in the Midwest, 3.0 per cent in the West and 2.1 per cent in the South. Permits declined 5.5 per cent in the Northeast.
April 18, 2018 - The Globe and Mail reported that softwood lumber exports from British Columbia to the United States plunged 20 per cent in March from a year ago, the federal government said, amid railway transportation problems. | READ MORE.
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