USW Strike and Weak Markets Impact WFP Q3 Results

SEATTLE (Scrap Monster): Western Forest Products Inc. (WFP) announced results for third quarter of 2019. The quarterly results were impacted by ongoing strike action by the United Steelworkers and continued weakness in market. All of the company’s timberlands and most of its B.C.-based manufacturing divisions were out of operation in Q3 2019, due to the strike.

WFP reported negative adjusted EBITDA of $16.6 million in the third quarter 2019. This compares with adjusted EBITDA of $32.3 million in the corresponding quarter a year before and $15.1 million reported during the prior quarter. The company reported net loss of $18.7 million or $0.05 per diluted share, as compared with the net income of $15.1 million or $0.04 per dilutes share for the third quarter of 2018. It must be noted that WFP had reported net loss of $0.70 million in the second quarter of the current year.

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The lumber production, at 48 million board feet, during the quarter, was down substantially by more than 78% than the previous year. The log production from B.C. coastal operations nosedived from 815,000 cubic metres to as low as 21,000 cubic metres. The lumber revenue plunged heavily by 54% to $109.7 million Also, lumber shipment volumes were down by 58% year-on-year to 90 million board feet. Meantime, log revenue recorded a decline of approximately 19% to $27.4 million.

The company generated revenue of $141.6 million in the third quarter of the current year.