Prince George, B.C.- West Fraser Timber is reporting a loss of $17 million on sales of $681 million in the first quarter of 2012.

This is the second straight quarter in which West Fraser has recorded a loss as the 4^th quarter of 2011 saw the company  down $11 million.  

 

In a statement, President of West Fraser, Hank Ketcham sounded cautiously optimistic  "Although there are some improvements in our markets, we will continue to monitor capital spending and focus on maintaining a strong balance sheet as the North American and Asian economies remain fragile."

 

In the quarter, the West Fraser lumber operations generated an operating loss of $29 million and EBITDA of negative $6 million. The improvement over the prior quarter was smaller than anticipated due to continued weakness in offshore prices for low-grade SPF lumber.

The panel segment, which includes plywood, LVL and MDF, generated $1 million of operating earnings and EBITDA of $5 million in the quarter, a marginal increase over the prior quarter.

 

Pulp and paper operations generated operating earnings in the quarter of $17 million and EBITDA of $30 million. The improvement over the prior quarter occurred despite the decline in pulp prices as the previous quarter’s results were negatively affected by the Hinton Pulp maintenance shutdown.

 

Although low-grade SPF lumber prices strengthened late in the quarter returning to a more normalized level compared to the SPF 2&Better benchmark price. Lumber productivity and cost improvements are expected to be realized over the next few quarters as various major capital projects are completed.