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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Racist graffiti sparks Cloverdale man to renew calls for City to clean up street

Hate message the latest garbage dumped at the end of 176th Street

Survey suggests 83 per cent of Surreyites ‘favour a referendum’ on policing transition

Survey was conducted by Pollara Strategic Insights on behalf of the National Police Federation

Brand new Tesla crashes into Surrey store front, mounts gas line

Driver was heading to the Autoplan store, straight off the lot

Surrey RCMP looking for missing 21-year-old

Police say Kenny Tran was last seen at around 1:30 p.m. on Feb. 19

‘A bag full of garbage every 15 metres’: Surrey industrial area filled with trash

Local workers looking to recruit business, raise funds to help dispose of litter

VIDEO: B.C. senior recalls ‘crazy’ wartime decision to grab bear cub from den

Henry Martens – now 96 – says he was lucky to be alive after youthful decision to enter a bear’s den

New Alberta forward joins Vancouver Giants’ ranks

new left-handed 18-year-old is a familiar face to Giants head coach Michael Dyck

Cheapest in B.C.: Penticton gas prices dip below $1 per litre

Two stores in Penticton have gas below a dollar.

Loans or gifts? Judge rules woman must pay B.C. man back $7K

B.C. judge rules that woman must pay back more than $7,000 in advanced funds to man

VIDEO: Outpouring of worldwide support for bullied Australian boy

Australian actor Hugh Jackman said ‘you are stronger than you know, mate’

Mugging with airsoft gun results in Langley school lockdown

Police found the weapon and a stolen phone later

‘A horror show:’ Ex-employee shares experience at problematic Chilliwack seniors’ home

Workers are paid below industry standard at all Retirement Concepts facilities

Forest industry protests northern B.C. caribou protection deal

B.C. Mining Association supports federal-Indigenous plan

Chilliwack physiotherapist charged with sexual assault

Mounties urging other potential victims to make contact

Most Read