West Fraser Timber Co. Ltd. is reporting higher first-quarter sales and earnings on higher prices and production of lumber and building panels after completing its $4-billion all-stock takeover of Norbord Inc. on Feb. 1.
The Vancouver-based company, which reports its financials in U.S. dollars, says earnings increased to US$665 million on $2.3 billion in sales in the first three months of 2021, up from earnings of $9 million on sales of $890 million in the same period of 2020.
Earnings were also up from $282 million on sales of $1.29 billion in the fourth quarter of 2020.
West Fraser says its lumber segment generated adjusted earnings before interest, taxes, depreciation and amortization of $646 million, up from $53 million in the year-earlier period, as higher commodity prices were partly offset by lower shipment volumes due to seasonal railcar shortages in Canada and extreme winter conditions in the U.S. South.
Its engineered wood products segment, formed after the Norbord takeover, had adjusted EBITDA of $353 million, compared with $6 million from its panels division in the first quarter of 2020, thanks to the addition of Norbord oriented strand board panel volumes and higher prices and demand for plywood.
The company says the outlook for its building and panel products is robust and it plans to maximize capacity utilization this year given ongoing high demand from residential home construction, repair and remodelling.