Market MoversOn The Rise West Fraser Timber Co. Ltd. gained after saying it lost US$153-million in its fourth quarter, a steeper loss than US$94-million a year earlier. Sales for the quarter ended Dec. 31 were US$1.5-billion, down from US$1.6-billion.
Loss per diluted share was US$1.87, compared with US$1.13 a year earlier.
“While still weak, Q4 adjusted EBITDA of ($1.2) million was above our estimate of ($5.9) million and the consensus forecast of ($6.7) million. The reported figure included a $9.6 million q/q decrease to the inventory write-down provision — a positive item which was a larger-than-expected contributor. EPS of ($0.04) was also better than our estimate of ($0.05) — we matched consensus,” said TD Securities analyst Sean Steuart in a note.
“WEF’s results were relatively encouraging, and we are comfortable that the earnings have passed a cyclical floor, but, in our view, the company still lacks clear catalysts.”
West Fraser president and CEO Sean McLaren says the fourth quarter saw continued weakness in demand for the company’s North American lumber and European panel products, though demand was resilient for other products.
The company announced in January that it would permanently wind down and close its Fraser Lake, B.C., sawmill because it can’t access economically viable fibre in the region.
The news came after an announcement earlier in January that West Fraser was closing a sawmill in Maxville, Fla., and indefinitely curtailing operations at its Huttig, Ark., sawmill because of high fibre costs and soft lumber markets.