West Fraser Q2 profits surge as revenues more than quadruple on Norbord acquisition

Softwood lumber is pictured along the Fraser River in Richmond, B.C., Tuesday, April 25, 2017. THE CANADIAN PRESS/Jonathan Hayward

July 29, 2021 - 7:16 AM

VANCOUVER - West Fraser Timber Co. Ltd. says its profits surged in the second quarter as revenues more than quadrupled following the acquisition of Norbord.

The Vancouver-based forestry company says it earned US$1.49 billion or $12.32 per diluted share, up from US$35 million or 51 cents per share a year earlier.

Reporting in U.S. dollars, revenues for the three months ended June 30 were US$3.78 billion, up from US$921 million in the second quarter of 2020 and US$2.34 billion in the first quarter.

West Fraser was expected to earn US$11.71 per share on US$3.3 billion in revenues, according to financial data firm Refinitiv.

Lumber operating earnings were US$955 million on US$1.8 billion of sales, up from US$48 million on US$704 million of sales a year ago and US$607 million on US$1.3 billion of sales in the last quarter. The increase is attributable to higher lumber prices and shipment volumes following the recovery of seasonal railcar shortages in Canada and extreme winter weather in the U.S. in the previous quarter.

West Fraser says western Canadian wildfires that prompted British Columbia to declares a state of emergency are having an impact on its operations.

"The wildfires are affecting access to logging areas in some of our operating areas and impacting transportation networks we rely on to move our products. This has resulted in temporary suspensions of production due to raw material shortages, evacuation orders and difficulties in moving our finished product by truck and rail," it stated in a release.

"At this time, we cannot estimate when the situation will be alleviated or estimate the impact on our production and shipments."

Engineered wood products operating earnings were US$1.02 billion on US$1.58 billion of revenues in the first full quarter of Norbord operations, up from US$299 million on US$781 million of sales in the first quarter.

Pulp and paper operating earnings were US$17 million on US$216 million or sales, up from US$2 million on US$177 million of sales in the first quarter.

This report by The Canadian Press was first published July 29, 2021.

Companies in this story: (TSX:WFG)