West Fraser ("WFT") Announces Second Quarter Results
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/19/12 -- West Fraser Timber Co. Ltd. (TSX: WFT) today reported earnings for the second quarter of 2012 of $27 million and earnings per share of $0.63 on sales of $774 million. For the first half of 2012, earnings were $10 million and earnings per share were $0.24, on sales of $1.5 billion.
These results compare with previous periods as follows:
Operational Results
In the quarter the lumber segment generated operating earnings of $34 million and EBITDA of $53 million. Lumber prices rallied strongly as improved U.S. demand combined with continuing Asian demand for Canadian lumber. Higher lumber prices also triggered a reduction in duties (from 15% to 10%) charged on softwood lumber exported to the U.S. from B.C. and Alberta for the month of June 2012.
The panels segment, which includes plywood, LVL and MDF, generated operating earnings in the quarter of $8 million and EBITDA of $12 million. Improved plywood and MDF prices were the main contributors.
Pulp and paper operations generated operating earnings of $14 million and EBITDA of $26 million. The average NBSK benchmark price for the quarter increased to US$900 per tonne from US$870 in the previous quarter but reduced NBSK production and shipments and increased chemical costs resulted in a marginal decline in operating earnings compared with the previous quarter.
Outlook
We expect results from our lumber and panels businesses to improve if U.S. new home construction continues to recover. Despite some encouraging signs, the current recovery still appears to be fragile and could be set back by adverse global economic events.
The immediate outlook for our NBSK pulp business is negative as additional supply coming onstream will require market adjustments before prices will recover.
Hank Ketcham, West Fraser's Chairman and Chief Executive Officer, said, "We are encouraged by this quarter's results and we expect to see continuing operational improvements as a result of our extensive capital program and the efforts of all of our people. We are well positioned to take advantage of the anticipated recovery."
Softwood Lumber Agreement Dispute
In early 2011 the United States initiated an arbitration with Canada under the 2006 Softwood Lumber Agreement over its concern that British Columbia has misapplied or altered its timber pricing rules. An arbitration hearing took place in the first quarter. On July 18, 2012 the arbitration panel unanimously dismissed the U.S. claims in their entirety.
The Company
West Fraser is an integrated wood products company producing lumber, wood chips, LVL, MDF, plywood, pulp and newsprint. The Company has operations in western Canada and the southern United States.
Forward-Looking Statements
This news release contains historical information, descriptions of current circumstances and statements about potential future developments. The latter, which are forward-looking statements are included under the heading "Outlook", and are presented to provide reasonable guidance to the reader but their accuracy depends on a number of assumptions which are subject to various risks and uncertainties some of which are described under this heading. Actual outcomes and results will depend on a number of factors including those matters described in the 2011 annual Management's Discussion & Analysis under "Risks and Uncertainties", and may differ from those anticipated or projected. Accordingly, readers should exercise caution in relying upon forward-looking statements and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by applicable securities laws.
Management's Discussion & Analysis ("MD&A")
The Company's MD&A for the second quarter of 2012 is available on the Company's website: and on the System for Electronic Document Analysis and Retrieval at under the Company's profile.
Conference Call
Investors are invited to listen to the quarterly conference call on Friday, July 20, 2012 at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time) by dialing 1-800-952-6845 (toll-free North America). The call may also be accessed through West Fraser's website at . A presentation summarizing the second quarter results will also be available on the Company's website.
West Fraser shares trade on the Toronto Stock Exchange under the symbol: "WFT".
West Fraser Timber Co. Ltd.
Notes to Condensed Consolidated Interim Financial Statements
(figures are in millions of dollars except where indicated - unaudited)
1. Nature of operations
West Fraser is an integrated wood products company producing lumber, wood chips, LVL, MDF, plywood, pulp and newsprint and is listed on the Toronto Stock Exchange under the symbol WFT. Its executive office is located at 858 Beatty Street, Suite 501, Vancouver, British Columbia. The Company was formed by articles of amalgamation under the Business Corporations Act (British Columbia) and is registered in British Columbia, Canada.
2. Basis of presentation and statement of compliance
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as issued by the International Accounting Standards Board and using the same accounting policies and methods of their application as the December 31, 2011 annual financial statements. These condensed consolidated interim financial statements should be read in conjunction with the Company's 2011 annual financial statements.
3. Inventories
Inventories at June 30, 2012 were written down by $3.9 million (March 31, 2012 - $19.8 million; December 31, 2011 - $14.9 million; June 30, 2011 - $8.6 million) to reflect net realizable value being lower than cost.
4. Long-term debt and operating loans
Long-term debt
Operating loans
The Company has $530 million in revolving lines of credit, of which nil was drawn as at June 30, 2012 (December 31, 2011 - nil). Deferred financing costs of $5.1 million are included in other assets (December 31, 2011 - $5.7 million). As at June 30, 2012, letters of credit in the amount of $35.5 million have been issued under these facilities.
The $500 million committed facility, the $25 million demand line of credit facility dedicated to letters of credit and the US$300 million senior notes are secured by the Company's assets. A $5 million line of credit, which is available to a joint venture, is secured by the joint venture's current assets.
5. Other liabilities
6. Employee future benefits
The Company maintains defined benefit and defined contribution pension plans covering a majority of its employees. The defined benefit plans provide pension benefits based either on length of service or on earnings and length of service. Total pension expense for the defined benefit plans is $7.9 million for the three months ended June 30, 2012 (three months ended June 30, 2011 - $7.3 million) and $16.9 million for the six months ended June 30, 2012 (six months ended June 30, 2011 - $15.6 million). The Company also provides group life insurance, medical and extended health benefits to certain employee groups.
The status of the defined benefit pension plans and other benefit plans, in aggregate, is as follows:
The significant assumptions used to determine the period-end benefit obligations are as follows:
The change in the discount rate on obligations and the difference between the actual rate of return and the expected rate of return on plan assets generated an actuarial loss on employee future benefits, included in comprehensive earnings, as follows:
7. Other income (expense)
8. Tax provision
The Company's effective tax rate on earnings from continuing operations is as follows:
9. Discontinued operation
The Company permanently closed its linerboard and kraft paper mill, located in Kitimat, B.C., in January 2010 and the windup was substantially completed in December 2011.
10. Earnings per share
Basic earnings per share is calculated based on earnings available to Common shareholders, as set out below, using the weighted average number of Common shares and Class B Common shares outstanding.
Diluted earnings per share is calculated based on earnings available to Common shareholders adjusted to remove the actual share option expense (recovery) charged to earnings and after deducting a notional charge for share option expense assuming the use of the equity settled method, as set out below. The diluted weighted average number of shares is calculated using the treasury stock method. When earnings available to Common shareholders for diluted earnings per share are greater than earnings available to Common shareholders for basic earnings per share, the calculation is anti-dilutive and diluted earnings per share are deemed to be the same as basic earnings per share.
11. Green Transformation Program
In 2009 the Government of Canada confirmed an allocation of credits totalling $88.4 million to the Company under the Pulp and Paper Green Transformation Program (the "GT Program"). The GT Program provides funding for capital projects that improve the energy efficiency or environmental performance of Canadian pulp and paper mills. The credits were fully utilized by the Company. For the six months ended June 30, 2012, the Company received $39.9 million under the GT Program (year ended December 31, 2011 - $36.9 million; year ended December 31, 2010 - $1.6 million). At June 30, 2012, $10.0 million is included in accounts receivable related to expenditures under the GT Program.
12. Segmented information
The geographic distribution of external sales is as follows:
13. Contingency
On January 18, 2011 the United States initiated arbitration with Canada under the Softwood Lumber Agreement ("SLA") over its concern that the province of British Columbia ("B.C.") has misapplied or altered its timber pricing rules and as a result has charged too low a price for certain timber harvested on public lands in the B.C. interior. In August 2011 the United States filed a detailed statement of case with the arbitration panel and the parties exchanged pleadings in the fourth quarter of 2011. A hearing before the arbitration panel took place in February 2012.
On July 18, 2012 the arbitration panel unanimously dismissed the U.S. claims in their entirety.
Contacts:
West Fraser Timber Co. Ltd.
Larry Hughes
Vice-President, Finance and Chief Financial Officer
(604) 895-2700
West Fraser Timber Co. Ltd.
Rodger Hutchinson
Vice-President, Corporate Controller
(604) 895-2700
(604) 681-6061 (FAX)
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Datum: 19.07.2012 - 15:01 Uhr
Sprache: Deutsch
News-ID 1134903
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Forest and Paper Products
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