VANCOUVER — Lumber producer West Fraser Timber Co. Ltd. (TSX:WFT) says its second-quarter profit and sales jumped from a year ago as lumber prices improved.
The Vancouver-based company reported Thursday that second-quarter earnings after discontinued operations were $27 million, or 63 cents per share, up from $10 million, or a loss of nine cents per share in the same quarter of 2011.
Revenues rose to $774 million from $720 million in the year-earlier period.
The company said lumber prices rallied strongly as improved U.S. demand, along with continued demand from Asia helped raise sales.
The higher prices also triggered a reduction in duties —from 15 per cent to 10 per cent — on softwood lumber exported to the U.S. from B.C. and Alberta in June.
It added that its panels segment also improved along with higher prices.
Pulp and paper prices increased in the quarter to US$900 per tonne from US$870 in the previous quarter, but reduced production and shipments, along with increased chemical costs hit results in the segment.
West Fraser said it expects results from its lumber and panels businesses to improve if U.S. new home construction continues to recover. However, it warned that the recovery is still fragile and could be set back by adverse global economic events.
“We are encouraged by this quarter’s results and we expect to see continuing operational improvements as a result of our extensive capital program and the efforts of all of our people. We are well positioned to take advantage of the anticipated recovery,” said Hank Ketcham, West Fraser’s chairman and chief executive officer.
The company and other lumber producers won a significant victory Wednesday, when an international tribunal convened under the 2006 softwood lumber agreement ruled that Canada did not circumvent the deal by shipping large quantities of pine beetle-infested lumber south of the border.
The United States government argued that B.C. mills had an unfair advantage in softwood sales because they’ve been selling logs made from the destroyed trees at lower prices.
The three-member panel at the London Court of International Arbitration ruled in favour of Canada, though the details of the ruling will remain confidential for 10 days.