West Fraser Timber Co Ltd will focus on reducing costs and improving its efficiencies to overcome poor results blamed on the weak US housing market and strong Canadian dollar.
The company recorded a loss of C$3m in earnings during the fourth quarter, with a loss of C$34m over the year. This compares to earnings of C$296m in the fourth quarter of 2006 and C$398m over the year.
West Fraser‘s lumber operations contributed an earnings before interest, taxes, depreciation and amortisation loss of C$45m during the fourth quarter, a decline of C$18m on the third quarter. The company said this was down to the declining price of lumber, which had resulted in a number of operational curtailments at its sawmills in Canada and would see curtailments at a number of its US operations in 2008.
“We are obviously experiencing a very severe down cycle with a combination of the collapse of the US housing market and a very strong Canadian dollar,” said president and chief executive officer Hank Ketcham.
“There is very little we can do about the US housing crisis or the strong Canadian dollar. What we can do, and are doing, is focusing on reducing unnecessary costs and improving efficiencies.”
West Fraser noted that the recently announced acquisition of timber harvesting rights from Weyerhaeuser in Kamloops, Canada, will “contribute to the long-term viability of the company’s Chasm and 100 Mile House sawmills and Williams Lake plywood mill”.
