West Fraser Timber Co. Ltd. says it has posted a $131-million loss for the second quarter of the year.
In a statement issued Wednesday, CEO Ray Ferres said the company went through unscheduled downtime at its Hinton and Cariboo pulp mills due to shortages of fibre. Combined with declining prices, the segment experienced higher losses than expected.
"Notwithstanding these challenges, we did see signs of demand improvement for some of our key wood building products as the quarter unfolded against a backdrop of mortgage rates well above year-ago levels," Ferris said.
He said the company's North America engineered wood products segment "saw particular improvement" and demand in its oriented strand board business has recovered enough to increase shipments.
As in the prior quarter, the European engineered wood panels segment "helped offset some of the weakness in our other businesses.”
"The West Fraser team continues to manage through the market cycle and while there have been indications that the upward trend in mortgage rates may be nearing an end and that new home construction has stabilized, we will continue to operate with financial discipline, leveraging our strong balance sheet to reinvest in our operations and return capital to shareholders," Ferris said.
"We believe our financial flexibility remains a competitive advantage that allows us to continue our core strategy of being a low-cost producer of wood building products while also preparing us to capitalize on opportunities as the demand environment becomes more favourable in the years ahead."
Canfor is scheduled to issue its quarterly results on Thursday.
