Markets
Aug. 10, 2018 - Conifex Timber Inc. has reported results for the second quarter ended June 30, 2018.
Aug. 9, 2018 - Rising home prices and interest rates pushed housing affordability to a 10-year low in the second quarter of 2018, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) released today.
Aug. 8, 2018 - Stella-Jones Inc. has announced financial results for its second quarter ended June 30, 2018.
Aug. 3, 2018 - Interfor Corporation has recorded net earnings in Q2’18 of $63.8 million, or $0.91 per share, compared to $33.0 million, or $0.47 per share in Q1’18 and $24.5 million, or $0.35 per share in Q2’17. Adjusted net earnings in Q2’18 were $68.9 million or $0.98 per share, compared to $36.8 million, or $0.52 per share in Q1’18 and $28.7 million, or $0.41 per share in Q2’17.

Adjusted EBITDA was a record $123.8 million on sales of $619.9 million in Q2’18 versus $81.1 million on sales of $527.6 million in Q1’18.

Notable items in the quarter included:

• Higher Lumber Prices
  • The key benchmark prices improved quarter-over-quarter with the SYP Composite, Western SPF Composite and KD H-F Stud 2x4 9’ increasing by US$73, US$61 and US$94 per mfbm, respectively.  Interfor’s average lumber selling price increased $65 from Q1’18 to $753 per mfbm.   
• Increased Production and Shipments
  • Total lumber production was a record 688 million board feet or 22 million board feet more than the prior quarter. Production in the U.S. South region increased to 325 million board feet from 302 million board feet in the preceding quarter. The B.C. and U.S. Northwest regions accounted for 215 million board feet and 148 million board feet, respectively, compared to 218 million board feet and 146 million board feet in Q1’18, respectively. In Q2’18, the B.C Interior operations were negatively impacted by seven days of downtime at the Grand Forks mill, due to severe flooding in the region.

  • Total lumber shipments were 700 million board feet, of which 689 million board feet were Interfor produced volumes, with the balance of 11 million board feet being agency and wholesale volumes. Total lumber shipments were 52 million board feet higher than Q1’18, as Q1’18 shipments were negatively impacted by industry-wide logistics issues, and particularly by weather-impacted rail constraints in B.C. The company’s lumber inventory volume at June 30, 2018 was comparable to March 31, 2018.   
• Strong Cash Flows and Liquidity
  • Interfor generated $123.2 million of cash from operations before changes in working capital, or $1.76 per share.  Total cash generated from operations was $133.7 million.

  • Net debt ended the quarter at $34.4 million, or 3.4 per cent of invested capital, resulting in available liquidity of $542.3 million. 

  • Capital spending was $23.3 million on a mix of high-return discretionary, maintenance and woodlands projects.
• Softwood Lumber Duties
  • Interfor expensed $14.8 million of duties in the quarter, representing the full amount of countervailing (CV) and anti-dumping (AD) duties incurred on its Canadian shipments of softwood lumber into the U.S. at a combined rate of 20.23 per cent.

Strategic Capital Plan

• Interfor continues to make progress on its multi-year strategic capital plan that involves a number of discretionary projects designed to capture the opportunities within its current operating platform and to pursue opportunities for further growth. The strategic capital plan was advanced over the past quarter, including site preparation and mill readiness initiatives for the previously announced US$65 million of projects at the Meldrim, GA and Monticello, AR sawmills. The projects remain on track for completion in Q1’19. These projects are designed to increase production capacity by approximately 150 million board feet per year, as well as generate other benefits related to costs and product mix.

• In addition, the company has received Board approval to proceed with three new strategic capital projects totaling US$240 million at its Thomaston, GA, Eatonton, GA and Georgetown, SC sawmills. These projects include major modernizations and rebuilds, and are designed to increase production capacity by approximately 275 million board feet per year, as well as substantially reduce cash conversion costs, improve lumber recovery and enhance grade outturns and product mix. The projects are expected to generate a pre-tax cash payback of less than five years, using conservative lumber price assumptions. The projects are expected to be completed in various phases during 2019 to 2021.

• The company is also undertaking a number of machine center upgrades at certain mills in B.C., the U.S. Northwest and the U.S. South. These projects are planned for completion over the next 12 to 18 months.    

• The timeline for assessing and deciding upon greenfield sawmill opportunities in the Central Region of the U.S. South has been extended beyond mid-2018, as the company focused on completing plans for its strategic capital projects. With those projects now underway, the company is in a position to further develop greenfield opportunities over the coming months. A decision is dependent upon satisfactory conclusion of due diligence and assessment against Interfor’s investment criteria.

Debt Financing
In conjunction with the planned increase in capital spending over the coming several years, Interfor modified its debt financing arrangements in order to further enhance its financial flexibility. In particular, the company entered into an agreement to extend US$84 million of its 2021 to 2023 term debt maturities to 2027 to 2029. This transaction is expected to close in mid-August, upon which Interfor’s weighted average interest rate on its term debt will be 4.47 per cent. In addition, Interfor recently extended the maturity of its US$50 million U.S. Operating Line by two years to June 15, 2021. 

Liquidity

Balance Sheet
Interfor maintained a strong financial position throughout Q2’18. Net debt at June 30, 2018 was $34.4 million, or 3.4 per cent of invested capital, representing a decrease of $183.8 million from June 30, 2017, and a decrease of $84.9 million from Dec. 31, 2017. The majority of the decrease in net debt in Q2’18 is attributed to strong cash flows generated from operations. Net debt was negatively impacted by a weakened Canadian Dollar against the U.S. Dollar as all debt held was denominated in U.S. Dollars; this was partially hedged by the Company’s U.S. Dollar cash balances. 

As of June 30, 2018, the company had net working capital of $417.1 million and available liquidity of $542.3 million, including unrestricted cash and borrowing capacity on operating and term line facilities. 

On June 15, 2018, the company extended the maturity of its U.S. Operating line from May 1, 2019 to June 15, 2021, with no other significant changes. On July 10, 2018, Interfor entered into an agreement to extend US$84 million of its 2021 to 2023 Senior Secured Note maturities to 2027 to 2029. Upon completion of this transaction, which is expected in mid-August, Interfor’s weighted average interest rate on its term debt will be 4.47 per cent.   

These resources, in addition to cash generated from operations, will be used to support capital expenditures, working capital requirements and debt servicing commitments.  We believe that Interfor will have sufficient liquidity to fund operating and capital requirements for the foreseeable future.

Capital Resources
As of June 30, 2018, the company had commitments for capital expenditures totaling $44.9 million. 



Interfor is a growth-oriented lumber company with operations in Canada and the United States.  The Company has annual production capacity of approximately 3.1 billion board feet and offers one of the most diverse lines of lumber products to customers around the world.  For more information about Interfor, visit our website at www.interfor.com.

The Company’s unaudited consolidated financial statements and Management’s Discussion and Analysis for Q2’18 are available at www.sedar.com and www.interfor.com
Aug. 3, 2018 - Rayonier Advanced Materials Inc. has reported second quarter 2018 net income of $54 million, or $0.83 per diluted common share compared to $5 million, or $0.03 per diluted common share in the second quarter of 2017.
Aug. 3, 2018 - Western Forest Products Inc. has reported adjusted EBITDA of $50.2 million in the second quarter of 2018, compared to adjusted EBITDA of $47.1 million in the second quarter of 2017, and $43.0 million reported in the first quarter of 2018.
Aug. 2, 2018 - Resolute Forest Products Inc. has reported net income for the quarter ended June 30, 2018, of $72 million, or $0.77 per diluted share, compared to a net loss of $74 million, or $0.82 per share, in the same period in 2017.
Aug. 2, 2018 - Acadian Timber Corp. has reported financial and operating results for the three months ended June 30, 2018 — the second quarter.
July 30, 2018 - Weyerhaeuser Company reported second quarter net earnings of $317 million, or 42 cents per diluted share, on net sales of $2.1 billion. This compares with earnings of $24 million, or 3 cents per diluted share, on net sales of $1.8 billion for the same period last year.
July 26, 2018 - Canfor Corporation has reported its second quarter 2018 results.
July 20, 2018 - West Fraser Timber Co. Ltd. has reported its second quarter 2018 results.
July 18, 2018 - Total housing starts fell 12.3 per cent in June to a seasonally adjusted annual rate of 1.17 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department.
July 18, 2018 - Builder confidence in the market for newly-built single-family homes remained unchanged at a solid 68 reading in July on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

"Consumer demand for single-family homes is holding strong this summer, buoyed by steady job growth, income gains and low unemployment in many parts of the country," said NAHB chairman Randy Noel, a custom home builder from LaPlace, La.

"Builders are encouraged by growing housing demand, but they continue to be burdened by rising construction material costs," said NAHB chief economist Robert Dietz. "Builders need to manage these cost increases as they strive to provide competitively priced homes, especially as more first-time home buyers enter the housing market."

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.

The HMI index measuring current sales conditions remained unchanged at 74. Meanwhile, the component gauging expectations in the next six months dropped two points to 73 and the metric charting buyer traffic rose two points to 52.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 57 while the Midwest remained unchanged at 65. The West and South each fell one point to 75 and 70, respectively.

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.
July 10, 2018 - The recent run on lumber prices has put big smiles on the faces of sawmill operators and lumber traders.
June 25, 2018 - Sales of newly built, single-family homes rose 6.7 per cent in May to a seasonally adjusted annual rate of 689,000 units after a downwardly revised April report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the second-highest sales report since the Great Recession.

"Sales numbers continue to grow, spurred on by rising home equity, job growth and reports of a greater number of millennials entering the single-family housing market," said NAHB chairman Randy Noel, a custom home builder from LaPlace, La.

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the May reading of 689,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 299,000 in May, which is a 5.2-month supply at the current sales pace. The median sales price was $313,000.

"We saw a shift to more moderately priced home sales this month, which is an encouraging sign for newcomers to the market," said NAHB senior economist Michael Neal. "Since the end of the Great Recession, inventory has tracked the pace of sales growth. While we expect continued gains in single-family housing production, inventory may be partially constrained by ongoing price increases for lumber and other construction materials."

Regionally, new home sales rose 17.9 per cent in the South to a post-recession high and remained unchanged in the Midwest. Sales dropped 8.7 per cent in the West and 10 per cent in the Northeast.
Page 1 of 45

Subscription Centre

 
New Subscription
 
Already a Subscriber
 
Customer Service
 
View Digital Magazine Renew

Popular Articles

Marketplace


We are using cookies to give you the best experience on our website. By continuing to use the site, you agree to the use of cookies. To find out more, read our Privacy Policy.