Conifex Timber Declares Significant Surge In Q2 Earnings

VANCOUVER (Scrap Monster): Conifex Timber Inc. has reported robust results for the quarter ending June 30, 2017. The high lumber prices and boosted lumber sales helped the company to produce record results for the quarter. Meantime, the company has earmarked countervailing duty (CVD) deposits of $4.6 million.

The press release issued by the company states that the revenues totaled $116.4 million during the second quarter of the year, registering 16% jump over the first quarter. When matched with the corresponding quarter last year, the revenues jumped higher by 12%. The revenues during Q1 2017 and Q2 2016 had amounted to $100.3 million and $103.7 million. The significant increase in quarter-on-quarter revenue was mainly on the back of 19% jump in lumber segment revenues, Conifex press release noted.

The operating income including the CVD deposits totaled $6.4 million, jumping over four-folds from $1.5 million during the previous quarter. The Q2 ’17 operating income stood higher when matched with $5.1 million in the same quarter last year. Net income for Q2 this year was $4.2 million as against a net loss of $1.4 million during the previous quarter. Also, year-to-date net income was $2.8 million.

Lumber segment revenues increased by 13% during the quarter. The operating earnings from the segment stood at $5.3 million. The segment EBITDA surged higher from $5.1 million in the previous quarter and $8.7 million in the second quarter of 2016 to $15.4 million in the second quarter of 2017. Lumber segment adjusted EBITDA stood at $20.5 million for the first six months of the current year as compared with $13.2 million a year before.

The revenue from lumber produced by Conifex surged higher by 25% quarter-on-quarter to $70.8 million. The lumber shipment volumes returned to typical levels during the quarter. The shipment volumes of this lumber were up by 16% over the previous quarter. The wholesale lumber revenues increased by over 10% when compared with Q2 2016. Also, lumber production totaled nearly 132 million board feet. The improved operating results of the segment were mainly driven by higher lumber prices and weak Canadian dollar.

Going forward, Conifex expects the average benchmark lumber prices for Western SPF to continue in the same level through the remainder of 2017. The uncertainty around softwood lumber dispute is likely to persist. The planned expansion in the U.S. South is expected to reduce the company’s cash flow volatility in the lumber segment. Also, the demand and pricing for products shipped to China and Japan is expected to remain solid during the balance of the year.