West Fraser announces third quarter results
By Marketwired/West Fraser
October 30, 2015 - West Fraser Timber Co. Ltd. reported earnings of $56 million or $0.67 basic earnings per share on sales of $1,044 million in the third 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 13 of our 2015 third quarter Management's Discussion & Analysis.
1. In this News Release, reference is made to Adjusted EBITDA, Adjusted earnings and Adjusted basic 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 13 of our 2015 third quarter Management's Discussion & Analysis for details of these adjustments.
In the quarter our lumber operations generated an operating loss of $9 million (Q2-15 - operating earnings of $13 million) and Adjusted EBITDA of $26 million (Q2-15 - $45 million). A decline in U.S. SYP and low-grade SPF lumber prices, partially offset by a weaker Canadian dollar, was a major factor in the decreases. Increased shipments from our U.S. sawmills partially mitigated the operating earnings decline.
The panel segment, which includes plywood, LVL and MDF, experienced improved prices and generated operating earnings in the quarter of $26 million (Q2-15 - $17 million) and Adjusted EBITDA of $29 million (Q2-15 - $21 million).
Our pulp operations achieved improved production and shipments and, combined with our jointly-owned newsprint division, generated operating earnings of $14 million (Q2-15 - operating loss of $1 million) and Adjusted EBITDA of $25 million (Q2-15 - $8 million). U.S.-dollar price declines were partially offset by a weaker Canadian dollar.
"This quarter's results reflect the continued oversupply of lumber in key markets which was exacerbated by a sharp drop in demand from China late in the quarter,” said Ted Seraphim, president and CEO. “Our panel and pulp and paper segments helped offset our weak lumber results which reinforces the value of our integrated Canadian platform. We continue to go through the start up phase of many of our capital projects, particularly in the United States, and we look forward to achieving the related benefits over the next few quarters. Following the end of the quarter we announced an agreement to acquire a sawmill in Manning, Alberta and related timber harvesting rights. We're delighted to welcome the Manning team to the West Fraser family at the end of October."
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.
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.
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.