West Fraser Quarterly Earnings Took a Hit

SEATTLE (Scrap Monster): Vancouver, B.C.-based West Fraser reported results for the fourth quarter and full year of 2019. The company’s earnings took a hit from high fibre input costs in the B.C. region and muted market demand condition.

According to company press release, it reported net sales of $1.129 billion in Q4 ’19, as compared with $1.274 billion in 4Q 2018. The adjusted EBITDA totalled $80 million during the quarter. During the full year 2019, West Fraser reported sales of $4.877 billion. The adjusted EBITDA for the year was $301 million.

Division-wise, the company’s lumber segment generated operating loss of $23 million and adjusted EBITDA of $69 million in the last quarter of 2019. The panels segment reported operating earnings of $8 million and adjusted EBITDA of $13 million. Meantime, West Fraser’s pulp and paper segment generated operating loss of $12 million and an adjusted EBITDA loss of $1 million.

The company expects lumber production to increase by nearly 350 mmfbm in 2020 over the previous year. Also, pulp production is expected to see slight improvement during the year.

Ray Ferris, CEO, West Fraser noted that 2019 had been a challenging year on multiple fronts. The earnings were mainly impacted by high fibre input costs and softer demand environment, he added.

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