West Fraser results far below expectations as lumber prices, duties bite
|Toronto Star 19 Jul 2019 at 08:01|
VANCOUVER - West Fraser Timber Co Ltd. reported a loss in its second quarter as it saw a substantial reversal compared with a year ago as lower lumber prices and export duties cut into its results.
The Vancouver-based company says it lost $58 million or 85 cents per share in the quarter compared with earnings of $346 million or $4.52 per share in the same quarter last year.
Sales totalled $1.32 billion, down from $1.83 billion a year ago.
On an adjusted basis, it lost $17 million, or 25 cents per share for the quarter ending June 30, compared with earnings $397 million or $5.19 a share last year.
The results were well below analyst expectations of adjusted earnings of nine cents per share according to Thomson Reuters Eikon.
In the quarter, West Fraser announced the permanent closure of its Chasm, B.C. lumber mill and a shift reduction at its 100 Mile House mill in response to high log costs in the province and lumber prices that are much lower than the record highs of last year.
The company cut about 250 million board feet of permanent and temporary lumber production in the first half of the year, while permanent reductions are expected to cut its annual capacity by 614 million board feet.