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West Fraser announces Q2 2015 results

July 22, 2015 - West Fraser Timber Co. Ltd. reported earnings of $14 million or $0.17 basic earnings per share on sales of $1,029 million in the second quarter of 2015. These results compare with previous periods as shown in the table below.

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" on page 12 of our 2015 second quarter Management's Discussion & Analysis.


($ millions except earnings per               2015                2014      

share ("EPS"))                            Q2      Q1     YTD      Q2     YTD


Sales                                       1,029   1,014   2,043   1,053   1,862

Adjusted EBITDA(1)                      72     173      245      148      297

Operating earnings                       18     125      143      106      212

Earnings                                      14       49       63        74      146

Basic EPS ($)                            0.17    0.58    0.76      0.87     1.71

Adjusted Earnings(1)                    13     100     113        66      150

Adjusted basic EPS ($)(1)          0.16     1.19    1.35     0.77     1.74


(1) In this News Release, reference is made to Adjusted EBITDA, Adjusted earnings and Adjusted EPS (collectively "these measures"). We believe that, in addition to earnings, these measures are useful performance indicators.  

None of these measures is a generally accepted earnings measure under International Financial Reporting Standards ("IFRS") and none has a standardized meaning prescribed by IFRS. Investors are cautioned that none of these measures should be considered as an alternative to earnings, EPS or cash flow, as determined in accordance with IFRS. As there is no standardized method of calculating any of these measures, our method of calculating each of them may differ from the methods used by other entities and, accordingly, our use of any of these measures may not be directly comparable to similarly titled measures used by other entities. Refer to the tables in the section titled "Non-IFRS Measures" on page 12 of our 2015 second quarter Management's Discussion & Analysis for details of these adjustments.

Operational Results
In the quarter our lumber operations generated operating earnings of $13 million (Q1-15 - $84 million) and Adjusted EBITDA of $45 million (Q1-15 - $117 million). A sharp decline in U.S. lumber prices which triggered the imposition of export duties on shipments of lumber from Canada into the U.S., a slightly stronger Canadian dollar and increased inventory writedowns were major factors in the decreases. Significantly improved lumber production and shipments partially mitigated the operating earnings decline. 

The panel segment, which includes plywood, LVL and MDF, generated operating earnings in the quarter of $17 million (Q1-15 - $23 million) and Adjusted EBITDA of $21 million (Q1-15 - $26 million). The decline mostly reflects decreased plywood prices partially offset by improved shipments for all of our panel products. 

Our pulp & paper operations generated an operating loss of $1 million (Q1-15 - earnings of $20 million) and Adjusted EBITDA of $8 million (Q1-15 - $30 million). Decreased prices for all of our pulp & paper products and scheduled maintenance shutdowns at our Cariboo NBSK mill and both BCTMP mills were significant factors in the reduced earnings.

Ted Seraphim, our President and CEO, said "This was a very challenging quarter as lumber prices reached lows that we haven't seen for some time. In the second half of the quarter we saw a gradual strengthening of key SPF benchmark prices, which is encouraging, but we expect continuing volatility until demand reaches more normal levels. Despite the quarter's results I am encouraged by the benefits that we are seeing from the capital investments that we have made over the past few years and look forward to that trend continuing."

Management's Discussion & Analysis ("MD&A") 
The Company's MD&A is available on the Company's website: www.westfraser.com and on the System for Electronic Document Analysis and Retrieval at www.sedar.com under the Company's profile.

The Company 
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.

Forward-Looking Statement
This Report contains historical information, descriptions of current circumstances and statements about potential future developments. The latter, which are forward-looking statements and are included under the heading "Outlook", are presented to provide reasonable guidance to the reader but their accuracy depends on a number of assumptions and is subject to various risks and uncertainties. Actual outcomes and results will depend on a number of factors that could affect the ability of the Company to execute its business plans, including those matters described in the 2014 annual Management's Discussion & Analysis under "Risks and Uncertainties", and may differ materially from those anticipated or projected. Accordingly, readers should exercise caution in relying upon forward-looking statements and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by applicable securities laws.

July 22, 2015  By Marketwired/West Fraser

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