US-based forest products company Weyerhaeuser’s conversion to a real estate investment trust (REIT) has had a dramatic effect on its earnings, with the company reporting a US$1.28bn net profit for 2010.
The result is a stark contrast from the US$545m loss recorded in 2009, but just over US$1bn of the profit resulted from income tax adjustments related to Weyerhaeuser’s REIT conversion.
“The actions we took in 2010 enhanced our ability to return value to our shareholders through our long-term strategy,” said Dan Fulton, president and chief executive officer.
“The most significant, our conversion to a REIT, enhances our ability to manage and grow our core asset – more than six million acres of valuable timberlands.”
On the trading front, Weyerhaeuser said its full-year sales increased to US$6.6bn (2009: US$5.5bn).
The wood products business was affected by the “extremely challenging” housing market conditions – challenges it expects will continue in 2011.
The division recorded a loss before special items of US$85m in the fourth quarter (2009: US$123m) – a period in which it was also hit for US$103m due to asset impairments, closures and restructuring.
Fourth-quarter results improved due to slightly lower log costs and reduced selling, general and administrative expenses.
Weyerhaeuser anticipates a smaller loss from the segment in the first quarter due to improved operating rates, higher selling prices, and continued cost reductions.
The company said increase saw its profits rocket in 2010 to US$1.28bn, but the lion’s share has reported net earnings of US$1.28bn, or US$3.99 per diluted share, for the year 2010, compared to a net loss of US$545m, or US$2.58 per diluted share, for the year 2009.
