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

VIDEO: Abbotsford donair restaurant catches fire

Donairo’s on McCallum Street site of kitchen fire

Abbotsford School District reviewing transportation services

Info session for parents being held at Abbotsford Middle School at 7 p.m. on Dec. 9

Abbotsford among 4 performances of Messiah in the Valley

Chilliwack Symphony Orchestra and Chorus performs Thursday, Dec. 12

Hallmark movie homes featured on Abbotsford tour

Mt. Lehman Christmas Home Tour offers peek into six local houses

VIDEO: Boys help rescue Cariboo bear cub

The cub, weighing just 24lbs, has been taken to wildlife sanctuary in Northwest B.C. for the winter

Campbell River mom’s iPhone containing priceless photos stolen from Victoria hospital parkade

The phone contained photos, heartbeat recordings of her late son

Miller nets winner as Canucks edge Sabres 6-5 in OT

Roussel, Leivo tally two apiece for Vancouver

‘Norovirus-like’ outbreak interrupts Bantam hockey showcase in Greater Victoria

Several athletes were sent home, quarantined on the ferry

Strong turnout of volunteers to search for missing senior

Ted Vanderveen disappeared in rural Maple Ridge on Nov. 28

SkyTrain strike to begin Tuesday with ‘full shutdown’, CUPE says

BCRTC president says job action is ‘completely unacceptable’ to use SkyTrain users ‘as leverage’

Kelowna man attempts to steal bait bike from RCMP parking lot

38-year-old Brian Richard Harbison is facing several charges

Owners of hotels on Vancouver’s Downtown Eastside fight $1 expropriation in court

Vancouver City Council voted to expropriate the properties for $1 each in November

‘Things haven’t changed enough:’ Ecole Polytechnique anniversary prompts reflection

Fourteen women were fatally shot by a gunman at the Montreal school on Dec. 6, 1989

Most Read