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WFP turnover plummets by almost 72% in Q4

23.03.2020 − 

In the fourth quarter Western Forest Products (WFP), Vancouver, British Columbia, recorded a net loss of -Can$29.2m. The group was thus confronted by a decline for the third consecutive quarter in the 2019 financial year. The net result, at Can$1.9m, had only been positive in the first quarter. In the reporting period the adjusted EBITDA was also negative at -Can$18.1m.

According to WFP, business activity in the fourth quarter was particularly seriously affected by the strikes initiated by the United Steelworkers trade union. Timber harvesting as well as cutting in the sawmills could only be carried out to a restricted extent. In order to reduce the effects of the strike, the majority of roundwood stock volumes not already allocated in prior agreements has been sold, the working capital reduced and certain items of expenditure postponed. Turnover, at only Can$80.1m, nevertheless transpired to be 72% lower than the preceding year.

In the lumber business division, only 34m bdft softwood lumber was produced in the fourth quarter, and only 44m bdft was sold. Turnover generated with lumber declined accordingly by 71% to Can$66.1m compared to the corresponding quarter in the preceding year. As a result of lower sales prices and the higher costs due to a decline in utilisation of capacities, the adjusted EBITDA was negative at -Can$18.1m.

Roundwood sales in the reporting period were also considerably lower than the previous year. At 135,000m³, the volume of roundwood sold was down 63%. Furthermore, the average roundwood price decreased by 11% to Can$87/m³. Turnover generated with roundwood, at Can$12.1m, therefore only amounted to one third of the preceding year’s figure.

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