West Fraser improves productivity
Oct. 30, 2014 - West Fraser Timber reported earnings of $70 million or $0.83 per share on sales of $1,030 million in the third quarter of 2014.
In the quarter our lumber operations generated operating earnings of $101 million (Q2 - $81 million) and EBITDA of $131 million (Q2- $106 million). The increased earnings were largely the result of reduced costs and certain manufacturing productivity improvements related to capital investments.
Our panel segment generated operating earnings of $25 million (Q2 - $10 million) and EBITDA of $29 million (Q2 - $13 million), the result of substantially improved plywood prices.
Our pulp and paper operations generated an operating loss of $2 million compared to operating earnings of $19 million in the previous quarter and EBITDA of $9 million (Q2 - $30 million). The loss was largely the result of scheduled maintenance downtime at our Hinton pulp mill followed by a difficult startup.
We have seen gradual recovery in U.S. home construction and expect the recovery to continue. Log costs are expected to trend higher in Canada as competition for purchased wood increases in certain areas of B.C. and contractor costs increase. However, as we complete our capital projects, we expect productivity improvements and cost reductions to continue.
"The largest capital program in our Company's history is currently underway and I expect combined capital expenditures for 2013 and 2014 to exceed $700 million," said Ted Seraphim, our President and CEO. "I'm excited about what these investments are doing to improve the competitiveness of the Company and how we are positioning our operations to succeed as U.S. housing continues its slow recovery."