08:39:49 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



West Fraser Timber Co Ltd
Symbol WFT
Shares Issued 75,642,560
Close 2017-10-23 C$ 76.99
Market Cap C$ 5,823,720,694
Recent Sedar Documents

West Fraser earns $120-million in Q3

2017-10-23 17:20 ET - News Release

Mr. Ted Seraphim reports

WEST FRASER ANNOUNCES THIRD QUARTER RESULTS

West Fraser Timber Co. Ltd. has provided its third-quarter 2017 results.

Highlights:

  • Completed acquisition of six sawmills and a finger joint mill in Florida and Georgia;
  • Adjusted earnings before interest, taxes, depreciation and amortization of $269-million for the quarter;
  • Quarter ending net-debt-to-capital ratio of 16 per cent.

                    RESULTS COMPARED WITH PREVIOUS PERIODS
                 ($-millions except earnings per share (EPS))

                                       Q3 2017 Q2 2017 YTD 2017 Q3 2016 YTD 2016

Sales                                  $ 1,247 $ 1,322  $ 3,758 $ 1,155  $ 3,343 
Adjusted EBITDA (1)                        269     305      819     213      481   
Operating earnings                         177     217      577     156      355   
Earnings                                   120     146      389     107      247   
Basic EPS ($)                             1.53    1.86     4.97    1.35     3.06  
Adjusted earnings (1)                      150     174      458     115      229   
Adjusted basic EPS ($)(1)                 1.93    2.23     5.87    1.45     2.84  

(1) In this news release, reference is made to adjusted EBITDA, adjusted earnings
    and adjusted basic earnings per share. The company believes that, in addition
    to earnings, these measures are useful performance indicators. None of these
    measures is a generally accepted earnings measure under international financial
    reporting standards (IFRS), and none has a standardized meaning prescribed by
    IFRS. Investors are cautioned that these measures should not 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. Refer to the tables in the section titled "non-IFRS measures"
    in the third-quarter 2017 management's discussion and analysis for details
    of these adjustments.

Gilman acquisition

On Aug. 31, 2017, the company completed the acquisition of the Gilman Companies for net cash consideration of $525-million ($418-million (U.S.)). The Gilman Companies comprised six sawmills and a finger joint mill in Florida and Georgia, as well as an administrative office in St. Marys, Ga. Ted Seraphim, the president and chief executive officer, said: "We are delighted to welcome the Gilman leadership and employees to the West Fraser family. This acquisition is a major step in our growth strategy as we expand our lumber business in the United States."

Forest fires in British Columbia and hurricanes in the U.S. South

A number of wildfires throughout the interior region of British Columbia resulted in a provincial state of emergency being declared from July 7 to Sept. 15, 2017. Operations in 100 Mile House, Williams Lake and Chasm were briefly suspended due to the wildfires, reducing the company's production by 55-million board feet of lumber and 15,000 square feet of plywood.

The 2017 hurricane season was more severe than normal, causing significant damage to areas in southeast Texas and Florida. The company was fortunate that its facilities were undamaged and that disruptions to its operations were minimal.

Operational results

The lumber segment generated operating earnings of $126-million (Q2 2017: $171-million), and adjusted earnings before interest, taxes, depreciation and amortization of $195-million (Q2 2017: $240-million). This quarter's results were negatively impacted by lower product pricing and lower SPF production as a result of the British Columbia forest fires. Countervailing and antidumping duties, which commenced in the previous quarter, resulted in an expense of $31-million for the current quarter.

The panels segment generated operating earnings in the quarter of $45-million (Q2 2017: $23-million) and adjusted EBITDA of $48-million (Q2 2017: $26-million). Improved plywood pricing was the primary driver of improved results.

The pulp and paper segment generated operating earnings of $21-million (Q2 2017: $32-million) and adjusted EBITDA of $30-million (Q2 2017: $42-million). The major factors contributing to the decrease in operating earnings were lower Canadian dollar pulp prices and increased maintenance costs from the Hinton pulp mill major maintenance shutdown.

Softwood lumber dispute

The U.S. Department of Commerce's preliminary review resulted in a West Fraser specific countervailing duty rate of 24.12 per cent effective April 28, 2017, and an anti-dumping duty rate of 6.76 per cent, effective June 30, 2017, resulting in an expense of $31-million for the current quarter and $65-million for the first nine months of 2017. The requirement that the company pay countervailing duties was suspended on Aug. 24, 2017, until final determination is determined by the U.S. International Trade Commission.

Management's discussion & analysis (MD&A)

The company's MD&A is available on the company's website and on the System for Electronic Document Analysis and Retrieval under the company's profile.

Conference call

Investors are invited to listen to the quarterly conference call on Tuesday, Oct. 24, 2017, at 8:30 a.m. PT (11:30 a.m. ET) by dialling 1-888-390-0546 (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)                            
                                                                                                 
                                                  July 1 to Sept. 30,   Jan. 1 to Sept. 30,
                                                     2017       2016      2017        2016        
                                                                                                 
Sales                                             $ 1,247   $  1,155  $  3,758   $   3,343   
Costs and expenses                                                                               
Cost of products sold                                 775        739     2,313       2,263       
Freight and other distribution costs                  153        158       484         473         
Export duties                                          31          -        65           -           
Amortization                                           51         50       151         147         
Selling, general and administration                    50         45       142         126         
Equity-based compensation                              10          7        26         (21)        
                                                    1,070        999     3,181       2,988       
Operating earnings                                    177        156       577         355         
Finance expense                                        (8)        (7)      (23)        (22)        
Other                                                  (2)         1        (3)         (8)         
Earnings before tax                                   167        150       551         325         
Tax provision                                         (47)       (43)     (162)        (78)        
Earnings                                          $   120    $   107   $   389   $     247     
Earnings per share (dollars)
Basic                                             $  1.53    $  1.35   $  4.97   $    3.06    
Diluted                                           $  1.53    $  1.35   $  4.97   $    2.73    
Comprehensive earnings                                                                           
Earnings                                          $   120    $   107   $   389   $     247     
Other comprehensive earnings                                                                     
Translation gain (loss) on foreign operations         (24)         8       (45)        (27)        
Actuarial gain (loss) on 
postretirement benefits                                39         26         6         (79)        
Comprehensive earnings                            $   135    $   141   $   350   $     141     

About West Fraser Timber Co. Ltd.

West Fraser is a diversified wood products company producing lumber, LVL, MDF, plywood, pulp, newsprint, wood chips and energy with facilities in western Canada and the southern United States.

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