West Fraser says worst of its B.C. mill cuts done after wave of curtailments

Many companies in B.C.’s lumber industry has cut back and closed mills in recent month

Mill cutbacks in B.C. are still happening, but West Fraser Timber Co Ltd. said Friday that the worst of the pullback is behind it.

The company, like many in B.C.’s lumber industry, has cut back and closed mills in recent months in response to limited log supplies and a plunge in lumber prices from record highs last year.

Canfor, for example, announced late Thursday it was indefinitely suspending operations at its Mackenzie sawmill and permanently cutting a shift at its Isle Pierre mill to reduce output

For its part, West Fraser CEO Ray Ferris said the company’s already announced cuts should put it on a more stable footing in the province going forward.

“From a strategic standpoint, much of our heavy lifting in British Columbia is now behind us,” Ferris told a conference call Friday to discuss the company’s latest financial results.

READ MORE: B.C. town declares financial crisis after sawmill closure leaves 230 workers jobless

West Fraser announced plans late last year to cut shifts at its mills in Quesnel, Fraser Lake, and in the last quarter announced it would also cut a shift at 100 Mile House and close its mill in Chasm in response to the squeeze on margins. The permanent reductions totalled about 614 million board feet.

“These permanent reductions, coupled with the impact of the temporary curtailments in the first half of 2019 by approximately 250 million board feet, have been disruptive, costly, and extremely difficult for our employees, our log contractors, our suppliers and our communities,” said Ferris, who stepped into the chief executive role July 1.

The shift in fortunes compared with last year were clear in West Fraser’s results, which showed it lost $17 million, or 25 cents per share for the quarter ending June 30, compared with earnings $397 million or $5.19 a share last year.

The results were also well below analyst expectations of adjusted earnings of nine cents per share according to Thomson Reuters Eikon.

RBC Capital Markets analyst Paul Quinn, characterizing the second quarter as a “ferris wheel of issues, said lumber earnings were below his expectations, made worse by worse-than-expected export duties of $51 million.

While there is no quick recovery expected in B.C., West Fraser said its fortunes are looking brighter in the U.S. south that it started expanding into 15 years ago in the height of B.C.’s mountain pine beetle outbreak. The region now accounts for over 70 per cent of its lumber production.

“Going forward, we expect a less disruptive half across many of our businesses, particularly in the U.S. south,” said Ferris.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Junior hockey back, as Flames host exhibition

Ice Hawks visit Maple Ridge on Aug. 23

Resident asks Maple Ridge council to skip UBCM reception

Doesn’t want politicians to attend China-sponsored event

The scenic route through Maple Ridge

Winding Fern Crescent offers relaxing views

Bulldogs defeat Ridge Meadows Royals

Exhibition game proved to be challenging for both teams

Pitt Meadows man attacked on Lougheed Highway

Ridge Meadows RCMP not sure if road rage incident

B.C. sockeye returns drop as official calls 2019 ‘extremely challenging’

Federal government says officials are seeing the same thing off Alaska and Washington state

Expanded support to help B.C. youth from care attend university still falling short

Inadequate support, limited awareness and eligibility restrictions some of the existing challenges

Ethnic media aim to help maintain boost in voting by new Canadians

Statistics Canada says new Canadians made up about one-fifth of the voting population in 2016

Cross-examination begins for B.C. dad accused of killing young daughters

Andrew Berry is charged in the deaths of six-year-old Chloe and four-year-old Aubrey in 2017

Dog attacked by river otters, Penticton owner says

Marie Fletcher says her dog was pulled underwater by four river otters in the Penticton Channel

BC SPCA overwhelmed with cats, kittens needing homes

Large number of cruelty investigations, plus normal ‘kitten season’ to blame

Memorial to deceased teen stays in place through Labour Day

Hundreds of tributes have been left at the Walnut Grove skate park

Wife charged in husband’s death in Sechelt

Karin Fischer has been charged with second-degree murder in the death of her husband, Max

Most Read