Financial Pain Continues for West Fraser
By 250 News
Wednesday, July 22, 2009 04:01 AM
Prince George, B.C.- West Fraser Timber is reporting a second quarter loss of $39 million on sales of $667 million. That totals a loss of $122 million on sales of $1.3 billion for the first half of 2009.
That is worse than last year which saw a loss of $68 million in the first half of 2008.
Hank Ketcham, West Fraser's Chairman, President and CEO stated: "Our results reflect the continuing very poor economic environment that has significantly reduced home construction in North America and reduced the demand for our pulp and paper products."
U.S. housing starts remain at historic low levels. There are some indications of a potential recovery, including a declining supply of new homes for sale and improved affordability, but it is anticipated that general economic growth will be necessary to support any meaningful recovery in building product prices and demand from current low levels. Pulp and paper markets continue to be extremely weak due to the general global slowdown.
"Our Company will continue to operate with a focus on minimizing losses and conserving cash until clear signs of recovery are evident," said Mr. Ketcham.
The Company's lumber operations produced EBITDA for the quarter of $1 million, compared to EBITDA of negative $47 million for the first quarter of 2009, reflecting an increase in lumber prices in the current quarter and the net effect of adjustments to the carrying values of log and lumber inventories during the first half of 2009.
Panel operations, which include plywood, MDF and LVL, generated EBITDA for the quarter of $5 million compared to $7 million in the previous quarter reflecting continuing weakness in North American new home construction.
Pulp and paper operations recorded EBITDA of negative $18 million compared to positive $17 million in the previous quarter as a result of price declines for all products combined with a scheduled maintenance shutdown at the Cariboo facility and the maintenance shutdown and market-related downtime at the Kitimat linerboard and kraft paper mill in the second quarter.
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America is about to be hit hard by inflationary pressures on interest rates. Everyone and their dog knows the US Fed is a corrupt private organization for the benefit of ponzi scheme bankers that have manipulated our markets and our market growth for most of the last few decades into a place where they have no where else to go... but face up to the criminality of their existence.
Ron Paul's audit bill now has the support of all republicans and a good portion of democrats, so accountability is coming for those criminal banksters. Last year Ron Paul was alone in calling for an audit... things have changed and by this fall the ponzi scheme called the US Fed dollar could be collapsed. That will kill the housing industry and any industry associated with it unless a backup plan is in place to make a smooth transition to a legal rule of law economy.
West Fraser, Canfor and all the other big corporation should be doing what they can to influence policy at this critical time to ensure we have a way of making international trade through a respected, transparent and accountable financial system. We should not be looking to share a currency with any other nation, as that is a surrender of national sovereignty, but we should be looking at how international trade will be facilitated after the collapse of the US Fed banking system, and how this new currency of trade will be appropriately valued.
IMO Canadian corporations should be calling for international trade to be made through an international currency backed by raw resources like lumber, pulp, gold, silver, coal, oil, gas and real commodities that are in fact the underlying value of any currency. If these corporations continue to back the fraud called the US Fed, then they will eventually be the victims of that fraud. No more would be the days of operating their business around the whims of a corrupt bankster financial world, and the banksters insider manipulations of bubbles and busts through the evil 'economists', but rather a new world of free enterprise driven by a rule of law financial sector, and driven by true market forces... not manipulated by economists and their interest rate driven fiat currencies and derivative futures markets.
The next 6-months will see big changes taking shape and companies with an interest in how these changes play out should be acting now recognizing the true evil that is at the root of todays problems... or wither away in a market of chaos.
Time Will tell