First Quarter Highlights
- Sales of $1.2 billion
- Adjusted EBITDA of $110 million or 9% of sales
- Curtailed 125 million board feet of B.C. production in the quarter
- Permanently reduced B.C. production by 300 million board feet on an annual basis
- Reinvested $108 million through capital expenditure and returned $64 million to shareholders through share buybacks and dividends
- Net debt to capital ratio of 27% and available liquidity of $208 million
- Additional $100 million operating credit facility made available on April 24, 2019
Our lumber segment generated operating earnings of $2 million (Q4-18 - $22 million loss) and Adjusted EBITDA of $84 million (Q4-18 - $68 million). The current quarter’s results were negatively impacted by lower SPF and SYP production and a decline in SPF market demand compared to the previous quarter. SPF production for the quarter was affected by the previously announced temporary curtailments at our Williams Lake, Chasm, 100 Mile and Chetwynd sawmills and the permanent curtailment of the third-shift at our Quesnel and Fraser Lake sawmills resulting in 125 MMfbm of lower production (Q4-18 - 25 MMfbm lower from temporary curtailments). Despite this, operating earnings were higher in the current quarter due in part to improved SPF pricing and higher SYP shipments. Lastly, the impact on earnings of log and lumber inventory write-downs to market value was nil in the current quarter compared to $17 million in the fourth quarter of 2018.
Our panels segment generated operating earnings in the quarter of $11 million (Q4-18 - $4 million) and Adjusted EBITDA of $15 million (Q4-18 - $9 million). Improved plywood pricing was the major contributor to the improved results.
Our pulp & paper segment generated operating earnings of $1 million (Q4-18 - $36 million) and Adjusted EBITDA of $11 million (Q4-18 - $47 million). This quarter, our Hinton pulp mill experienced planned and unplanned shutdowns which resulted in 22,000 tonnes of lost production compared to the previous quarter. This gave rise to higher manufacturing costs which when accompanied with lower pulp pricing resulted in lower operating earnings compared to the previous quarter. This was partially offset by lower fibre costs, higher BCTMP shipment volumes and lower manufacturing costs at our Quesnel River pulp mill following their planned shutdowns in the fourth quarter of 2018.
We ended the quarter with $208 million of available liquidity and remain well within our leverage parameters. Subsequent to quarter end, we secured a new $100 million demand operating credit facility as well as an additional $20 million on our letter of credit facility.
Source: West Fraser