WEST FRASER REDUCES LOSSES
West Fraser Timber Co. Ltd. reported a fourth quarter 2009 loss of $20 million on Friday, a significant improvement over the $198 million loss the company reported for the previous quarter and a $70 million loss in the fourth quarter of 2008. For the year, West Fraser lost $341 million versus $137 million in 2008.
The Vancouver-based company was the second major Canadian lumber producer in less than a week to report significant improvements in its financial results. Cross-town rival Canfor Corporation reported its earnings late last week – a $17 million loss for the fourth quarter and $70 million for the year. In 2008, Canfor lost $230 million in the fourth and $345 million for the year.
West Fraser’s Q4 2009 results included several significant items: Asset impairment and restructuring charges of $49 million (after tax - $34 million); a valuation allowance, which resulted in a reduction of the tax recovery of $3 million; and the translation of U.S. dollar-denominated debt, which resulted in a foreign exchange gain of $6 million (after tax - $5 million). Excluding these items, the company said they earned $12 million in the fourth quarter.
“Although 2009 was the Company’s worst year from the perspective of financial results, with many of our employees having to deal with production curtailments, I believe that we met the challenge of achieving new levels of cost-savings and efficiency,” said Hank Ketcham, West Fraser’s chairman, CEO and president. “As a result, we are extremely well positioned in terms of our current operating rates to benefit from improved demand and stronger prices in the future.”
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