VANCOUVER, BC-- West Fraser Timber Co. Ltd. (TSX:WFT) today reported earnings after discontinued operations of $39 million or $0.89 per share on sales of $719 million in the fourth quarter of 2010 and earnings after discontinued operations of $166 million or $3.84 per share, on sales of $2,886 million for 2010.
"Markets are still somewhat uneven, reflecting the fragile nature of the recovery. However, our mills ran well despite some challenging weather conditions and we are generally pleased with the results." said Hank Ketcham, the Company's Chairman, President and CEO.
In the quarter the Company's lumber operations generated operating earnings of $20 million (Q3 - $22 million) and EBITDA of $39 million (Q3 - $49 million). The Company's lumber operations benefited in 2010 from improved prices supported by continuing constrained supply and increased Chinese demand for SPF lumber.
The panel segment, which includes plywood, LVL and MDF, generated operating earnings in the quarter of $2 million (Q3 - $14 million) and EBITDA of $6 million (Q3 - $20 million) as plywood prices came under downward pressure as a result of increasing supplies of U.S. plywood into the Canadian market.
Pulp and paper operations generated operating earnings in the quarter of $30 million (Q3 - $41 million) and EBITDA of $44 million (Q3 - $55 million). Pulp prices weakened during the quarter with the NBSK benchmark averaging 3% lower than in the third quarter.
Although 2010 results represented a significant improvement to those achieved in 2009, the absence of a meaningful recovery of the U.S. housing market and continuing threats to global economic recovery leads to a cautious outlook for 2011. SPF lumber and pulp prices are likely to be positively influenced by continuing strong demand from Asia while SYP lumber and panel markets will continue to struggle until a turnaround in U.S. housing occurs. Although many analysts expect some improvement in U.S. housing there are a number of factors, notably high rates of foreclosures and significant shadow inventories, that could undermine any meaningful recovery.
"Despite some market uncertainties, we are well positioned to benefit from the eventual recovery. Our low-cost, highly-efficient facilities allow us to operate at high rates and generate value for our shareholders throughout the recovery cycle." said Hank Ketcham.
Annual Financial Statements and Management's Discussion & Analysis ("MD&A")
The Company's consolidated financial statements for the year ended December 31, 2010 and related MD&A is available on the Company's website: www.westfraser.com and on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com under the Company's profile.
West Fraser is an integrated wood products company producing lumber, wood chips, LVL, MDF, plywood, pulp and newsprint. The Company has operations in western Canada and the southern United States.
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