west fraser

Record EBITDA despite losses in Q4

Article by Gerd Ebner (translated by Eva Guzely) | 18.02.2019 - 14:55

Sawn timber business in the US is like a rollercoaster. Last year, the world’s biggest sawmill group West Fraser had this unpleasant experience. After record quarters (first to third quarter of 2018) for the Canadian group, losses followed in the fourth quarter. Despite this development, the group’s EBITDA reached a historical 1.5 billion CAD.

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After an income of 233 million CAD in the third quarter of 2018, the lumber segment generated an operating loss of 22 million CAD in the fourth quarter. For European timber industries, this is an inconceivable turn in the business situation within few weeks. West Fraser’s EBITDA plummeted from 339 million CAD in the third quarter to only 68 million CAD in the fourth quarter.

The fourth quarter losses were due to the free fall of sawn timber prices, the decline of sales in terms of quantities, the increase of log wood prices in British Columbia as well as difficult weather conditions in the U.S. South. The latter made harvesting costs go up in that region as well.

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