MONTREAL - Resolute Forest Products says lumber transaction prices rose $53 per thousand board feet, or 18 percent, last year, owing to strong market conditions and the improving housing construction and sales market.
While the former AbitibiBowater's business is concentrated in lackluster pulp and paper, wood products results were the bright spot in Resolute Forest Products latest quarterly results.
The wood products segment reported operating income of $14 million in the fourth quarter, $8 million higher than the third. Average transaction price was unchanged but shipments rose 1%. The company reported a $7 million increase in the value of its lumber products inventory as a result of increasing market prices for lumber products.
As a result of stronger market conditions and gradually improving North American housing starts, operating income for its wood products segment increased $51 million in the year, to $26 million, and average transaction price rose $53 per thousand board feet, or 18 percent.
"Wood products should continue to show progress as housing starts build on recent improvements," said Richard Garneau, president and CEO. "Our ongoing growth projects - the capacity enhancement in Thunder Bay, in addition to the announced restart of the Ignace sawmill and construction of the new Atikokan sawmill to be completed in 2014 - further enhance our position in the lumber segment for the future."
Shipments were down 9 percent as a result of the closure of the Oakhill sawmill in Nova Scotia and downtime in Quebec sawmills. Manufacturing costs rose $16 million mainly because of higher stumpage fees in Quebec, which is tied to lumber pricing, Resolute reported.
Overall, Resolute Forest Products Inc. reported a net loss of $2 million for the year ended December 31, 2012, on sales of $4.5 billion.
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including newsprint, commercial printing papers, market pulp and wood products. The Company owns or operates over 40 pulp and paper mills and wood products facilities in the United States, Canada and South Korea, and power generation assets in Canada. Marketing its products in close to 80 countries, Resolute has third-party certified 100% of its managed woodlands to at least one of three internationally-recognized responsible forest management standards, including 65% certified to the Forest Stewardship Council® (FSC) standards. The shares of Resolute Forest Products trade under the stock symbol RFP on both the New York Stock Exchange and the Toronto Stock Exchange.
Resolute and other member companies of the Forest Products Association of Canada, as well as a number of environmental organizations, are partners in the Canadian Boreal Forest Agreement. The group works to identify solutions to conservation issues that meet the goal of balancing equally the three pillars of sustainability linked to human activities: environmental, social and economic. Resolute is also a member of the World Wildlife Fund's Climate Savers program, in which businesses establish ambitious targets to voluntarily reduce greenhouse gas emissions and work aggressively toward achieving them.