West Fraser Timber Plunged to Net Loss in Third Quarter 2019

SEATTLE (Scrap Monster): West Fraser Timber Co. Ltd. reported third quarter 2019 results. The company reported net loss of $45 million during the quarter, as compared with net earnings of $238 million in the same quarter a year before. The quarterly loss is mainly attributed to reduced lumber production, said the company press release.

West Fraser completed the permanent closure of its Chasm, B.C. lumber facility during the quarter. Also, the company completed the elimination of the third shift at 100 Mile House, B.C. facility. These coupled with various reduced schedules and downtimes at its other mills resulted in 3% decline in overall lumber production. The decline is despite increased production at its U.S. South mills. Incidentally, the U.S. South Lumber production surged higher by 7% over the prior quarter.

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The adjusted EBITDA for the lumber segment was more or less consistent with the prior quarter at $39 million. The year-to-date lumber shipments exceeded production by 179 million board feet. The plywood production and shipments dropped over the quarter. On the contrary, panels segment adjusted EBITDA increased from Q2 this year. West Fraser generated cash flow from operations of $116 million in Q3 ’19.

Ray Ferris, CEO of West Fraser highlighted the significant actions to right size its B.C. lumber operations over the past year. In addition, he also pointed out that it has been successful in completing several capital projects in the U.S. South during this period. The company is just beginning to see the benefits of these investments, Ferris said.