North American timber firms report Q1 profits
3 May 2014Some of North America’s largest forest product producers are continuing to post largely upbeat trading results.
Weyerhaeuser’s first quarter net profits reached US$183m (2013: US$144m), while net sales were also up to US$1.98bn (2013: US$1.95bn). Its wood products division recorded pre-tax profits before special items of US$64m.
Higher average lumber sales were partially offset by lower sales for OSB and lower sales of engineered wood products. Wood products sales volumes declined compared to the fourth quarter of 2013, because of severe weather and transportation challenges as a result of Canadian rail car and trucking availability.
Weyerhaeuser expects “significantly” higher earnings from the wood products division in Q2.
West Fraser Timber’s earnings before interest, tax, depreciation and amortisation (EBITDA) were C$148m (2013: C$141m).
Its lumber division achieved EBITDA of C$107m, thanks to higher southern yellow pine prices and a weaker Canadian dollar. The panels division – including plywood, LVL and MDF - generated EBITDA of C$11m, reflecting higher plywood prices.
West Fraser also flagged up the restricted railcar availability and severe winter as having hampered its transport of products to markets, leading to unusually high levels of finished good inventories at the end of Q1.
“We expect lumber prices to be volatile over the balance of 2014 as the supply chain adjusts to more normal shipping flows and the weather-delayed building season progresses,” it said.
Boise Cascade’s sales were up 3% in Q1 to US$767.2m, with 9% growth in the wood products division and 1% in building materials distribution. EBITDA was down 19% to US$26.8m.
The wood products division’s EBITDA was down 15% to US$23m, with building materials distribution down 20% to US$8.2m.
Lower commodity wood product prices, particularly structural panels, coupled with the severe weather and transportation difficulties impacted the results. Price increases of 5% in engineered wood products and 23% in lumber resulted in sales growth of US$10.2m, but were offset by a decrease of US$15.2m because of lower plywood prices.
