04:52:53 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



West Fraser Timber Co Ltd
Symbol WFT
Shares Issued 80,175,079
Close 2016-02-11 C$ 41.83
Market Cap C$ 3,353,723,555
Recent Sedar Documents

West Fraser Timber earns $104-million in 2015

2016-02-11 17:53 ET - News Release

Mr. Ted Seraphim reports

WEST FRASER ANNOUNCES FOURTH QUARTER RESULTS

West Fraser Timber Co. Ltd. had a loss of $15-million or 18 cents per share (basic) on sales of $1,013-million in the fourth quarter of 2015, and earnings of $104-million or $1.25 per share (basic) on sales of $4.1-billion for 2015. These results compare with previous periods as shown in the accompanying table.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted earnings and adjusted basic EPS (earnings per share) as described in this news release are non-IFRS (international financial reporting standards) measures.

(in millions of dollars, except EPS)       Q4 2015    Q3 2015    YTD 2015     Q4 2014    YTD 2014

Sales                                     $  1,013   $  1,044    $  4,100     $   964    $  3,856
Adjusted EBITDA(1)                              90         82         417         157         621
Operating earnings                              18         88         249          83         406
Earnings                                       (15)        56         104          43         259
Basic EPS ($)                                (0.18)      0.67        1.25        0.51        3.06
Adjusted earnings(1)                            30         36         176          84         327
Adjusted basic EPS ($)(1)                     0.38       0.42        2.12        1.00        3.86

1. In this news release, reference is made to adjusted EBITDA, adjusted earnings and adjusted 
   basic EPS. The company believes that, in addition to earnings, these measures are useful 
   performance indicators. These measures are not generally accepted earnings measures under IFRS
   and do not have standardized meanings prescribed by IFRS. Investors are cautioned that none of 
   these measures should be considered as an alternative to earnings, EPS or cash flow, as 
   determined in accordance with IFRS. As there is no standardized method of calculating any of 
   these measures, the company's method of calculating each of them may differ from the methods 
   used by other entities and, accordingly, the company's use of any of these measures may not be 
    directly comparable with similarly titled measures used by other entities.

Operational results

In the quarter, the company's lumber operations generated operating earnings of $17-million (third quarter 2015 -- operating loss of $9-million) and adjusted EBITDA of $55-million (third quarter 2015 -- $26-million). An increase in U.S. SYP (southern yellow pine) and low-grade SPF (spruce/pine/fir) lumber prices and a slightly weaker Canadian dollar were major factors in the improvement on a quarter-to-quarter basis. The benefit of increased shipments from the company's Canadian mills was offset by a decrease in production and shipments from its U.S. sawmills.

The company's panels segment, which includes plywood, LVL (laminated veneer lumber) and MDF (medium-density fibreboard), generated operating earnings in the quarter of $16-million (Q3-15 -- $26-million) and adjusted EBITDA of $19-million (Q3-15 -- $29-million). Plywood and MDF markets experienced a seasonal decline and prices decreased accordingly.

The company's pulp and paper segment generated operating earnings of $8-million (Q3-15 -- $14-million) and adjusted EBITDA of $17-million (Q3-15 -- $25-million). Production and shipments from the company's pulp mills were similar to the previous quarter, but key prices declined. Newsprint shipments improved, but prices continued their secular decline.

Outlook

"We weathered a sharp deterioration in lumber prices in 2015, which was the result of a number of external factors, such as a delayed building season due to poor weather in the first quarter of 2015 and a significant slowdown in demand from China during the third quarter. We expect U.S. housing to continue to improve in 2016 and currently are experiencing strong demand for lumber from our customers in China. We are continuing to focus on those factors that are within our control: all the elements of operational excellence. On that front, I am encouraged that we are improving many aspects of our performance and that throughout our company, our people are focused on taking advantage of all the opportunities that are presented to us," said Ted Seraphim, president and chief executive officer.

The company also announces that on April 19, 2016, Hank Ketcham will relinquish the title of executive chairman and will become the non-executive chairman of the board. This step completes the transition of the company's senior executive position to Mr. Seraphim. Mr. Ketcham has been the senior member of the company's executive team since his appointment as president and CEO in 1985. Mr. Seraphim commented, "I know that Hank will continue to play a key role at West Fraser and I look forward to receiving his counsel and advice in the future."

Annual financial statements and management's discussion and analysis (MD&A)

The company's consolidated financial statements for the year ended Dec. 31, 2015, and related MD&A are available on the company's website and on SEDAR.

Dividend declared

The board of directors of the company has declared a dividend of seven cents per share on the common shares and the Class B common shares in the capital of the company, payable on April 4, 2016, to shareholders of record on March 21, 2016.

Dividends are designated to be eligible dividends pursuant to Subsection 89(14) of the Income Tax Act (Canada) and any applicable provincial legislation pertaining to eligible dividends.

Conference call

Investors are invited to listen to the quarterly conference call on Friday, Feb. 12, 2016, at 8:30 a.m. PT (11:30 a.m. ET) by dialling 1-866-225-0198 (toll-free North America). The call may also be accessed through West Fraser's website.

 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
            (in millions of dollars, except where indicated)

                                     Oct. 1 to Dec. 31,    Jan. 1 to Dec. 31,
                                      2015        2014      2015        2014

Sales                             $  1,013   $     964  $  4,100   $   3,856
Costs and expenses
Cost of products sold                  712         631     2,874       2,538
Freight and other distribution
costs                                  160         137       627         548
Export taxes                             3           -        29           -
Amortization                            50          43       191         170
Selling, general and
administration                          48          39       153         149
Equity-based compensation               22          31       (23)         45
                                       995         881     3,851       3,450
Operating earnings                      18          83       249         406
Finance expense                         (6)         (6)      (29)        (26)
Other                                  (16)         (7)      (64)         (5)
Earnings before tax                     (4)         70       156         375
Tax provision                          (11)        (27)      (52)       (116)
Earnings                          $    (15)  $      43  $    104   $     259
Earnings per share ($)
Basic                             $  (0.18)  $    0.51  $   1.25   $    3.06
Diluted                           $  (0.18)  $    0.51  $   0.89   $    3.06
Comprehensive earnings
Earnings                          $    (15)  $      43  $    104   $     259
Other comprehensive earnings
Translation gain on foreign
operations                              25          19       109          45
Actuarial gain (loss) on 
postretirement benefits(1)              19         (38)      (12)        (87)
Comprehensive earnings            $     29   $      24  $    201   $     217

1. Net of tax provision of $7-million for the three months ended Dec. 31, 
   2015 (three months ended Dec. 31, 2014 -- $14-million recovery) and 
   $5-million tax recovery for the year ended Dec. 31, 2015 (year ended 
   Dec. 31, 2014 -- $31-million recovery).

We seek Safe Harbor.

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