Interfor Reports 2018 Results

by pmnationtalk on February 8, 2019143 Views

February 07, 2019

EBITDA(1) of $280 million and Net Earnings of $112 million in 2018

NCIB Purchases of 2.3 million Shares for $37 million in 2018

Net Debt to Invested Capital(1) of 6%

INTERFOR CORPORATION (“Interfor” or the “Company”) (TSX: IFP) recorded net earnings of $111.7 million, or $1.60 per share, in 2018, compared to $97.2 million, or $1.39 per share in 2017. Adjusted EBITDA was $280.4 million on record annual sales of $2.2 billion.

Interfor recorded a net loss in Q4’18 of $13.2 million, or $0.19 per share, compared to net earnings of $28.1 million, or $0.40 per share in Q3’18 and $36.2 million, or $0.52 per share in Q4’17. Adjusted net loss in Q4’18 was $19.8 million compared to Adjusted net earnings of $28.2 million in Q3’18 and $45.1 million in Q4’17.

Adjusted EBITDA was $6.2 million on sales of $468.5 million in Q4’18 versus $69.4 million on sales of $570.5 million in Q3’18.

Notable items in the quarter included:

  • Lumber Price Volatility
  • Key benchmark prices decreased in Q4’18 versus Q3’18. The Western SPF Composite and KD H-F Stud 2×4 9’ benchmarks fell US$117 and US$132 per mfbm, respectively. The SYP Composite decreased US$77 to US$386 per mfbm.
  • Interfor’s average lumber selling price fell $102 to $599 per mfbm, on 647 million board feet of lumber sales.
  • Lumber Production Decline Due to Temporary Factors
  • Total lumber production was 607 million board feet, down 67 million board feet quarter-over-quarter. This decline reflects Interfor’s previously announced plan to temporarily reduce production across its B.C. Interior operating platform. In addition, project related down-time in the U.S. South and normal holiday-related operating schedules further contributed to the lower lumber production.
  • Production in the B.C. region declined to 174 million board feet from 224 million board feet in the preceding quarter. The U.S. South and U.S. Northwest regions accounted for 303 million board feet and 130 million board feet, respectively, compared to 313 million board feet and 137 million board feet in Q3’18, respectively.
  • Lumber inventory levels ended at 32 million board feet lower than Q3’18.
  • Log Cost Inflation in B.C.
  • Operating cost increases were driven by B.C. log cost inflation, which was impacted by higher stumpage rates and open market log costs.

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