Western offers update on Strategic Capital Program
May 6, 2016 - Western Forest Products Inc. (Western) offered an update of its Strategic Capital Program in its first quarter results for 2016.
The company’s strategic capital program is focused on “the installation of proven technology that will deliver top quartile performance and improve our ability to manufacture the products that yield the best margin. In addition to investments in our manufacturing assets, we will also invest capital into strategic, high-return projects involving our information systems, timberlands assets, and forest inventories.”
Western has announced plans for $97.7 million of its $125.0 million strategic capital program. Through the end of the first quarter of 2016, the company has implemented and capitalized $82.4 million under that program, according to a recent press release. In the first quarter of 2016, Western had multiple projects in ramp-up including the modernization of its Duke Point sawmill and planer; new timber deck at its Chemainus sawmill; and the single-line conversion at its Ladysmith sawmill. In total, its first quarter strategic capital investment was $7.5 million.
“The Duke Point sawmill and planer modernization project are the primary focus for the second quarter of 2016, as we commence the installation of a new timber deck at the sawmill and commence planer production of kiln-dried lumber. We will also begin to map our timberlands utilizing LiDAR technology and expect to complete the data gathering phase of this project in 2016,” the company stated.
In the first quarter 2016 results, the company reported adjusted EBITDA of $35.7 million in the first quarter of 2016, compared to adjusted EBITDA of $29.6 million reported in both the same period last year and the previous quarter. Improved log and lumber pricing, higher lumber production and increased lumber sales volumes delivered a 21 per cent increase in adjusted EBITDA.
The company successfully grew revenue to $269.8 million in the first quarter of 2016, as compared to $248.6 million in the same period last year, and $265.6 million in the fourth quarter of 2015. Strong demand for specialty lumber products and improving commodity markets delivered higher lumber pricing. The positive pricing environment combined with higher sales volumes enabled Western to achieve its highest quarterly lumber revenue result since 2007.
"In the first quarter, we capitalized on improved markets for our products by increasing both lumber production and sales volumes. I am encouraged by our continued ability to deliver robust financial performance while accelerating the implementation of our strategic capital program," said Don Demens, president and CEO. "Looking ahead, we will focus on carrying this momentum forward, executing on our strategy and continuing to deliver strong returns to our shareholders.”
Source: Western Forest Products/Marketwired