West Fraser (“WFT”) Announces Fourth Quarter and Annual Results
Vancouver, British Columbia –(Feb. 19, 2009) – West Fraser Timber Co. Ltd. (TSX:WFT) today reported a loss of $70 million or $1.63 per share on sales of $746 million in the fourth quarter of 2008 and a loss of $137 million or $3.20 per share, on sales of $3,189 million for 2008. The quarterly loss includes an exchange loss of $46 million ($0.91 per share) on translation of long-term debt.Hank Ketcham, West Fraser’s Chairman, President and CEO stated: “In 2008 our Company suffered its worst financial loss in its history as the lengthy and severe downturn of the U.S. housing market continued and, late in the year, global pulp markets collapsed.”
The Company’s lumber operations recorded EBITDA for the quarter of negative $48 million, compared to EBITDA of $29 million for the third quarter of 2008, reflecting a sharp decline in the price of lumber late in the fourth quarter. This decline resulted in a period-ending inventory adjustment which further contributed to the loss. The Company curtailed additional production late in the fourth quarter and has announced further curtailments beginning in February 2009. After taking these curtailments into account, approximately 30% of the Company’s annual production capacity of 6 billion board feet has been curtailed. Many lumber producers have announced curtailments in an attempt to balance production against extremely weak demand.
Mr. Ketcham added: “We deeply regret the disruption to the lives of so many of our valued employees, their families and the communities in which we operate as a result of the production curtailments we have been forced to undertake.”
Panel operations generated EBITDA for the quarter of $11 million compared to $5 million in the previous quarter.
Pulp and paper operations generated EBITDA of $42 million compared to $45 million in the previous quarter although demand fell off sharply late in the quarter.
2009 is expected to be another very challenging year for West Fraser’s lumber operations as a near-term recovery of the U.S. housing market appears unlikely. Demand for the Company’s pulp and paper products is expected to be weak as the global economic recession continues. The Company will continue to assess its operating strategy in light of these poor conditions.
Annual Financial Statements and Management’s Discussion & Analysis (“MD&A”)
The Company’s consolidated financial statements for the year ended December 31, 2008 and related MD&A is available on the Company’s web site: www.westfraser.com and on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com under the Company’s profile.
The Board of Directors of the Company has declared a dividend of $0.14 per share on the Common shares and the Class B Common shares in the capital of the Company, payable on April 3, 2009 to shareholders of record on March 20, 2009.
West Fraser is an integrated wood products company producing lumber, wood chips, LVL, MDF, plywood, pulp, linerboard, kraft paper and newsprint. The Company has approximately 8,500 employees and operations in western Canada and the southern United States.
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