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

Part of a larger syndrome

Editor, The Times:

Love and Power Retreat weekend almost here

Finding peace, beauty, and acceptance

Back in Time

Historical Perspective

Clearwater residents participate in Amazing Race

Race was set up and run by the Barriere Outdoor Club on Oct. 5

ELECTION 2019: Climate strikes push environment to top of mind for federal leaders

Black Press Media presents a three-part series on three big election issues

Sentencing date set for Vancouver Island father convicted of killing his two daughters

Andrew Berry was found guilty of two counts of second-degree murder last month

B.C. woman finds mysterious coin among Grandma’s collection

Grandmother died when she was very young and her past is not well known to her mother

Advanced polls saw 4.7 million Canadians cast their ballots in the 2019 federal election

That’s a 29 per cent increase from advance polling in 2015

Pot use admission at U.S. border snagging Canadian boomers, says lawyer

A waiver to enter the U.S. can cost $2,000 and isn’t a guarantee

Health concerns over vaping cast haze over Canadian cannabis market expansion

More than 1,000 people in the United States, and a handful in Canada, have developed a lung ailment

UPDATE: British couple vacationing in Vancouver detained in U.S. after crossing border

CBP claims individuals were denied travel authorization, crossing was deliberate

After losing two baby boys, B.C. parents hope to cut through the taboo of infant death

Oct. 15 is Pregnancy and Infant Loss Awareness Day in B.C.

Cheating husband sues mistress for gifted ring after wife learns about affair

The husband gave his mistress $1,000 to buy herself a ring in December 2017

Most Read