B.C. Sawmill Curtailments Prompt Guidance Shortfall

SEATTLE (Scrap Monster): Pinnacle Renewable Energy announced that it expects a shortfall in its guidance for fiscal 2019 EBITDA, mainly on account of ongoing sawmill curtailments in the B.C. region.

According to the company, the reduced supply of sawmill residuals along with higher supply of comparatively expensive harvest residuals have led to higher fibre and cash conversion costs. The associated high operating costs are likely to impact Pinnacle’s operating results into the third quarter of 2019. Incidentally, sawmill curtailments have led to 14% decline in year-on-year production at its Smithers and Aliceville facilities, it noted.

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The company has made significant progress in making operational changes to nullify the impacts of the sawmill curtailments. It has achieved increased fibre deliveries to its B.C. mills by way of increasing fibre suppliers. In addition, Pinnacle has also increased processing capabilities for harvest residues at its various sawmill in the region. Also, the company has already commenced upgrades of dryer capacities at the Williams Lake and Meadowbank facilities.

Rob McCurdy, CEO, Pinnacle stated that the company will focus on reducing processing costs and improving operational efficiencies at its mills through the remainder of the year. The company expects improved margins, mainly contributed by fibre inventory optimization, operational improvements and diversification attempts.