BC Lumber firms report huge drop in profit during Q2 2014

VANCOUVER (Scrap Monster): The recent survey conducted by PricewaterhouseCoopers (PwC) indicates that second quarter profits of B.C Lumber companies plunged significantly over the previous year. The ten companies surveyed included West Fraser, Canfor and Fortress Paper.

According to the survey, the net profits for these companies totaled $180 million, 53% lower when compared with the net earnings of $383.8 million reported during Q2 2013. The continuing sluggishness in the US housing market has dented the profitability of major lumber companies. Incidentally, the US is one of the biggest customers for Canadian Lumber. The US housing starts dropped significantly during June this year. The starts for the whole year 2014 are likely to remain under 1 million units, for the seventh year in a row, PwC noted.

North Vancouver-based Fortress Paper reported a net loss of $20.8 million during the second quarter. The company had reported $134 million profit during same quarter the previous year. The decision by the Chinese Ministry of Commerce (MOFCOM) to impose 13% duty on cellulose pulp imported from Canada, Brazil and the US has largely affected the company’s exports to that country.

Vancouver-based West Fraser’s profits plunged by 32% over the year in Q2 2014. The second quarter profits totaled $74 million, as compared with $109 million during Q2 2013. However, the profits showed marginal rise when compared with $72 million reported during Q1 this year.