Interfor reported low results for Q4 2015. The lumber company is still optimistic about the demand in lumber for the mid-term. 2015’s Q4 brought the company adjusted net earnings of $5.5 million ($0.08 per diluted share), compared to the $10.2 million in 2014. For the quarter, the sales brought $411.4 million, an increase from the $389 million of the same period in 2014.
The 2015 production was 10 million board feet lower than 2014 and 50 million board feet lower than the preceding quarter, reaching only 568 million board feet.
Compared to 2015’s Q3, Interfor’s nine sawmills in south US summed 243 million board feet in Q4 of the same year. The decrease was due to the temporary market-related adjustments to operating schedules across the U.S. South platform and severe weather events which impacted the Georgetown sawmill most significantly.
The company's Canadian production increased 5 million board feet from 2015’s Q3, to 186 million board feet in the Q4. The start-up of Castlegar sawmill in the quarter reduced operationg hours at the other mills in the region, thus increasing the production.
Also, Interfor shipped approximately 90 million board feet of lumber to U.S. markets from its B.C. sawmills in Q4, which represents approximately 15% of Interfor's total current quarterly production. Moreover, the export taxes on lumber shipments from Canada into the U.S. were negligible in the Q4 because of the SLA that expired on October 12, 2015. The agreement included a standstill provision that precludes the U.S. from bringing trade action against Canadian softwood lumber producers for a 12 month period following expiry of the agreement.
Interfor's Northwest US operations summed 139 million board feet in the Q4, a decrease of 11 million board feet compared to the prior quarter.
The demand for lumber is expected to grow in the mid-term. Now that the US housing market is recovering and the market promotion in North America will reach full capacity, the sales will also increase. Also, in both US and Canada there are a lot of targeted initiatives to margin improvement opportunities.
[gravityform id="1" title="true" description="true"]
[gravityform id="2" title="true" description="true"]
