Vancouver, B.C. – West Fraser Timber Co. Ltd. reports second quarter 2019 results:
Second Quarter Highlights
- Softer commodity pricing in all segments reduces operating earnings relative to comparative periods.
- Cash flow from operations of $187 million for the quarter.
- Permanent closure of Chasm, British Columbia lumber mill announced in June along with shift reduction at 100 Mile House lumber mill.
- Lumber inventories reduced by approximately 150 million board feet.
- Quarter ending net debt to capital ratio of 26% and available liquidity of $365 million.
- On July 18, 2019, available credit under our syndicated committed revolving credit facilities was increased by $350 million to $850 million and maturity date of these facilities and US$200 million syndicated term loan extended to August 28, 2024. Proforma for this increase, available liquidity totaled $715 million.
- As part of our senior leadership transition plan, Ray Ferris replaced Ted Seraphim as our CEO.
Continuing difficult lumber market conditions and high log costs necessitated additional temporary curtailments in the quarter and the permanent closure of the Chasm, British Columbia lumber facility along with the elimination of the third shift of production at our 100 Mile House lumber mill. Permanent and temporary curtailments resulted in 250 MMfbm of reduced lumber production during the first half of 2019. Permanent curtailments are expected to reduce annual production capacity by 614 MMfbm.
Subsequent to quarter end, we increased the available credit under our syndicated committed revolving credit facilities to $850 million and extended the maturity date of these facilities and our US$200 million syndicated term loan to August 28, 2024. As a result, we have no significant debt maturities prior to August of 2024 and financial flexibility to navigate the current market conditions and continue to invest in our business.
As part of our senior leadership transition plan, on July 1, 2019 Ray Ferris replaced Ted Seraphim as our Chief Executive Officer on Mr. Seraphim’s retirement from that role.
Source: West Fraser