Ainsworth Lumber Co Ltd ANSBF

MR 1derful

[rampage1]

thanks for your opinion, very informative. and you hit the nail square on the head.you mentioned a handful of companies controlled a large portion of OSB production and therefore can ultimately control the price. it boils down to these companies using self discipline on wether or not to open the flood gates. whereas lumber is different with much less idled capacity available.

my previous point about 150 sawmills shut PERMANENTLY in North America from about 2006-2011 came from P .MOHR resources specialist at Scotia. she know her stuff !

TD is saying idled OSB takes anywhere from 2 to 4 quarters to bring into production depending on, trained labour ,availability, permits, have the plants been maintained during idle periods etc etc.

the biggest threat to this fragile US housing economy would another Lehman collapse, another 9-11, a war breaks out ie North Korea.etc

[louel]

The mills may have been shut.  Ask her who bought them out or what happened to their AAC.

[mr1derful]

louel. I'm not sure what point you are trying to make. Are you implying that some of these idled OSB mills have no AAC? Or are you talking about the supply of overall fibre being reduced because of a reduction in AAC's in Quebec and Bc with mpb?

[louel]

Most of the shut down mills. their AAC is still being cut. If they were bought out and the mill shut down that Quota is transferred to the buyer -5% under the  claw back rule.  It had little actual effect on actual provincial production.    In the case of Federated Coop at Canoe. Their mill is shut I expect permanently. But their timber Quota has been farmed out

[dosperros]

Thanks Louel, great insight..  I'd read some issues with BC tenure calling for reform where tenure was chained to communities -- apurtenacy -- but that's lifted now I take it?    Also,you mentioned peelers.  What's your take on this?  I see a lot of these logs being used in the 'wrong' way.  I worked at an outfit north of PG maybe 6 years back and

[estebancaballo]

Thanks for this Louel.....very useful info. At this point in the cycle and given your comments re: lumber vs OSB where do you see the best investment? Any companies that you think are best positioned? Obviously ANS is one of them......

[dosperros]

Consier margins for the lumebr vs. OSB comparision.  Most lumber mills have higher input costs (better logs) and more men in the facility, so higher production costs.  So, ballpark $300 mfbm in costs.  OSB is again, very approximatly, $200 per msf in cost.     Lumber is selling at just $400 per mfbm, OSB is $430 per mdf.     Cash drives stocks obviosuly, so ANS

[estebancaballo]

Are you sure about the $500K per day EBITDA, D? If so that would bring their next quarterly earnings to a level exceeding most analysts' expectations, would it not?

[mr1derful]

louel. I'm not sure we are talking about the same thing. I wrote about idled OSB mills eventually coming back into production and you wrote about timber quotas from idled lumber saw mills. How is what you wrote relevant to the the OSB market.?

[dosperros]

I'm not sure --   It was a back-of-the-napkin calc based on an EBITDA of $45M.  Q1 should be easy to estimate as volume will be the same and prices have not changed much.  We're nearly done the Q and prices are still @ $430.  This is good.  I've read the analyst reports and they are all pretty close, maybe a bit conservative.  You'll likely beat

[louel]

It was the suggestion that lumber had a great advantage going forward.  They are actually quite equal. Lumber does the basic framing but the rest of the building process or closing in so to speak is done with sheeting.  OSB is fast replacing plywood in most areas. It is a strong product cheaper and does just as good of job.  At first builders were leery if it would stand up. 

[mapmaker]

dosperros is pretty close. Last year ANS was making EBITDA of $290,000/day at an average of $271 OSB price. Compare that with ANS making EBITDA of $1,100,000/day in 2004 at an average of $369 OSB price. Currently the 2013 OSB average price is $414. If we use the same ratio as above, we get an EBITDA of $443,000/day for 2013 so far. cha-ching.

[mr1derful]

During Q42012, ANS had revenue of $117.9 million and adjusted EBITDA of $42.3 million. The benchmark NC price for 7/16 OSB was US$332. The company will easily earn $500,000 of EBITDA per day. If we are in a lumber supercycle the amount of cashflow that producers like ANS will earn will be so substantial that there will be additional returns to shareholders either via diveidends/and or share