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

Athlete in Focus: Nic Flinton

Like a lot of Canadians, Nic Flinton started playing hockey as soon… Continue reading

From the Free Press Archives

27 YEARS AGO (1992): The mountain pine beetle infestation was far more… Continue reading

What is your favourite Christmas movie?

Jessie Pruden 100 Mile House “They don’t have them on TV anymore.… Continue reading

100 Mile Performing Arts Society looking to take 100 Mile under the sea

The 100 Mile Performing Arts Society is looking to take the community… Continue reading

VIDEO: Success of wildlife corridors in Banff National Park has advocates wanting more

Demand for more highway protection escalated after seven elk were killed by a semi-trailer near Canmore

Pacioretty scores 2, Golden Knights top Canucks 6-3

Vegas goalie Fleury gets win No. 452

B.C. VIEWS: Hunger does not end with the season

Despite innovations in food distribution, the need is still there in B.C. communities

Fans sing Canadian anthem after sound system breaks at BMW IBSF World Cup

The Canadians in attendance made sure their team and flag were honoured on the podium

VIDEO: Fire destroys Big White Ski Resort chalet

Social media eulogies peg the property, nicknamed “The Pharamacy,” as both loved and hated

Prince George RCMP use bait packages to catch porch pirates over the holidays

First-in-Canada program with Amazon looks to combat parcel theft

Nanaimo mechanical engineer creates thief tracking program

Nanaimo Thief Tracking lets users plot and share information about thefts online

Mayor wants B.C. to institutionalize severely mental ill people who are homeless

Those suffering from mental health conditions, such as schizophrenia, need specialized care, mayor says

Most Read