486 0 Kommentare West Fraser Announces Fourth Quarter Results

VANCOUVER, BC--(Marketwired - February 11, 2016) - West Fraser (TSX: WFT) reported a loss $15 million or $(0.18) basic earnings per share on sales of $1,013 million in the fourth quarter of 2015 and earnings of $104 million or $1.25 basic earnings per share on sales of $4,100 million for 2015. These results compare with previous periods as shown in the table below.

Adjusted EBITDA, Adjusted earnings and Adjusted basic EPS as described in this News Release reflect the adjustments described in the tables referred to in the section titled "Non-IFRS Measures" on page 22 of our 2015 Management's Discussion & Analysis.


($millions except earnings per	2015				2014
share ("EPS"))	Q4		Q3	YTD	Q4	YTD
Sales	1,013		1,044	4,100	964	3,856
Adjusted EBITDA¹	90		82	417	157	621
Operating earnings	18		88	249	83	406
Earnings	(15	)	56	104	43	259
Basic EPS ($)	(0.18	)	0.67	1.25	0.51	3.06
Adjusted earnings¹	30		36	176	84	327
Adjusted basic EPS ($)¹	0.38		0.42	2.12	1.00	3.86

1. In this News Release, reference is made to Adjusted EBITDA, Adjusted earnings and Adjusted basic EPS (collectively "these measures"). We believe that, in addition to earnings, these measures are useful performance indicators. None of these measures is a generally accepted earnings measure under International Financial Reporting Standards ("IFRS") and none has a standardized meaning prescribed by IFRS. Investors are cautioned that none of these measures should be considered as an alternative to earnings, EPS or cash flow, as determined in accordance with IFRS. As there is no standardized method of calculating any of these measures, our method of calculating each of them may differ from the methods used by other entities and, accordingly, our use of any of these measures may not be directly comparable to similarly titled measures used by other entities. Refer to the tables in the section titled "Non-IFRS Measures" on page 22 of our 2015 Management's Discussion & Analysis for details of these adjustments.

Operational Results

In the quarter our lumber operations generated operating earnings of $17 million (Q3-15 -- operating loss of $9 million) and Adjusted EBITDA of $55 million (Q3-15 -- $26 million). An increase in U.S. SYP and low-grade SPF lumber prices and a slightly weaker Canadian dollar were major factors in the improvement on a quarter to quarter basis. The benefit of increased shipments from our Canadian mills was offset by a decrease in production and shipments from our U.S. sawmills.

Our panels segment, which includes plywood, LVL and MDF, generated operating earnings in the quarter of $16 million (Q3-15 -- $26 million) and Adjusted EBITDA of $19 million (Q3-15 -- $29 million). Plywood and MDF markets experienced a seasonal decline and prices decreased accordingly.

Our pulp & paper segment generated operating earnings of $8 million (Q3-15 -- $14 million) and Adjusted EBITDA of $17 million (Q3-15 -- $25 million). Production and shipments from our pulp mills were similar to the previous quarter but key prices declined. Newsprint shipments improved but prices continued their secular decline.

Outlook

"We weathered a sharp deterioration in lumber prices in 2015 which was the result of a number of external factors such as a delayed building season due to poor weather in the first quarter of 2015 and a significant slowdown in demand from China during the third quarter. We expect U.S. housing to continue to improve in 2016 and currently are experiencing strong demand for lumber from our customers in China. We are continuing to focus on those factors that are within our control: all the elements of operational excellence. On that front, I am encouraged that we are improving many aspects of our performance and that throughout our Company our people are focused on taking advantage of all the opportunities that are presented to us," said Ted Seraphim, our President and CEO.

We are also announcing that on April 19, 2016 Hank Ketcham will relinquish the title of Executive Chairman and will become our non-executive Chairman of the Board. This step completes the transition of our senior executive position to Ted Seraphim, our President and Chief Executive Officer. Hank Ketcham has been the senior member of our executive team since his appointment as President and Chief Executive Officer in 1985. Ted Seraphim commented: "I know that Hank will continue to play a key role at West Fraser and I look forward to receiving his counsel and advice in the future."

Annual Financial Statements and Management's Discussion & Analysis ("MD&A")

The Company's consolidated financial statements for the year ended December 31, 2015 and related MD&A is available on the Company's website: www.westfraser.com and on the System for Electronic Document Analysis and Retrieval at www.sedar.com under the Company's profile.

Dividend Declared

The Board of Directors of the Company has declared a dividend of $0.07 per share on the Common shares and the Class B Common shares in the capital of the Company, payable on April 4, 2016 to shareholders of record on March 21, 2016.

Dividends are designated to be eligible dividends pursuant to subsection 89(14) of the Income Tax Act (Canada) and any applicable provincial legislation pertaining to eligible dividends.

The Company

West Fraser is a diversified wood products company producing lumber, LVL, MDF, plywood, pulp, newsprint, wood chips and energy with facilities in western Canada and the southern United States.

Forward-Looking Statements

This Report contains historical information, descriptions of current circumstances and statements about potential future developments. The latter, which are forward-looking statements and are included under the heading "Outlook", are presented to provide reasonable guidance to the reader but their accuracy depends on a number of assumptions and is subject to various risks and uncertainties. Actual outcomes and results will depend on a number of factors that could affect the ability of the Company to execute its business plans, including those matters described in the 2015 annual Management's Discussion & Analysis under "Risks and Uncertainties", and may differ materially from those anticipated or projected. Accordingly, readers should exercise caution in relying upon forward-looking statements and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by applicable securities laws.

Conference Call

Investors are invited to listen to the quarterly conference call on Friday, February 12, 2016 at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time) by dialing 1-866-225-0198 (toll- free North America). The call may also be accessed through West Fraser's website at www.westfraser.com.


West Fraser Timber Co. Ltd.
Condensed Consolidated Balance Sheets
(in millions of Canadian dollars, except where indicated -- unaudited)

	December 31		December 31
	2015		2014
Assets
Current assets
Cash and short-term investments	$	13	$	21
Receivables		298		288
Income taxes receivable		11		-
Inventories (note 3)		631		586
Prepaid expenses		18		12
		971		907
Property, plant and equipment		1,609		1,469
Timber licences		570		530
Goodwill and other intangibles		369		350
Other assets		36		79
Deferred income tax assets		80		62
	$	3,635	$	3,397

Liabilities
Current liabilities
Cheques issued in excess of funds on deposit	$	29	$	36
Operating loans		178		103
Payables and accrued liabilities		351		411
Income taxes payable		-		26
Reforestation and decommissioning obligations		48		40
		606		616
Long-term debt		423		354
Other liabilities		269		244
Deferred income tax liabilities		190		154
		1,488		1,368

Shareholders' Equity
Share capital		579		587
Accumulated other comprehensive earnings		164		55
Retained earnings		1,404		1,387
		2,147		2,029
	$	3,635	$	3,397

Number of Common shares and Class B Common shares outstanding at February 11, 2016 was 82,457,433.


West Fraser Timber Co. Ltd.
Condensed Consolidated Statements of Changes in Shareholders' Equity
(in millions of Canadian dollars, except where indicated -- unaudited)

	October 1 to December 31						January 1 to December 31
	2015			2014			2015			2014

Share capital
Balance -- beginning of period	$	579		$	589		$	587		$	602
Common share repurchases		-			(2	)		(8	)		(15	)
Balance -- end of period	$	579		$	587		$	579		$	587

Accumulated other comprehensive earnings
Balance -- beginning of period	$	139		$	36		$	55		$	10
Translation gain on foreign operations		25			19			109			45
Balance -- end of period	$	164		$	55		$	164		$	55

Retained earnings
Balance -- beginning of period	$	1,406		$	1,404		$	1,387		$	1,335
Actuarial gain (loss) on post-retirement benefits		19			(38	)		(12	)		(87	)
Common share repurchases		-			(16	)		(52	)		(96	)
Earnings for the period		(15	)		43			104			259
Dividends		(6	)		(6	)		(23	)		(24	)
Balance -- end of period	$	1,404		$	1,387		$	1,404		$	1,387

Shareholders' Equity	$	2,147		$	2,029		$	2,147		$	2,029

West Fraser Timber Co. Ltd.
Condensed Consolidated Statements of Earnings and Comprehensive Earnings
(in millions of Canadian dollars, except where indicated - unaudited)

		October 1 to December 31						January 1 to December 31
		2015			2014			2015			2014

Sales	$	1,013		$	964		$	4,100		$	3,856

Costs and expenses
Cost of products sold		712			631			2,874			2,538
Freight and other distribution costs		160			137			627			548
Export taxes		3			-			29			-
Amortization		50			43			191			170
Selling, general and administration		48			39			153			149
Equity-based compensation		22			31			(23	)		45
		995			881			3,851			3,450
Operating earnings		18			83			249			406
Finance expense		(6	)		(6	)		(29	)		(26	)
Other (note 4)		(16	)		(7	)		(64	)		(5	)
Earnings before tax		(4	)		70			156			375
Tax provision (note 5)		(11	)		(27	)		(52	)		(116	)
Earnings	$	(15	)	$	43		$	104		$	259

Earnings per share (dollars) (note 6)
Basic	$	(0.18	)	$	0.51		$	1.25		$	3.06
Diluted	$	(0.18	)	$	0.51		$	0.89		$	3.06

Comprehensive earnings
Earnings	$	(15	)	$	43		$	104		$	259
Other comprehensive earnings
Translation gain on foreign operations		25			19			109			45
Actuarial gain (loss) on post-retirement benefits ¹		19			(38	)		(12	)		(87	)
Comprehensive earnings	$	29		$	24		$	201		$	217

1. Net of tax provision of $7 million for the three months ended December 31, 2015 (three months ended December 31, 2014 -- $14 million recovery) and $5 million tax recovery for the year ended December 31, 2015 (year ended December 31, 2014 -- $31 million recovery).

West Fraser Timber Co. Ltd.
Condensed Consolidated Statements of Cash Flows
(in millions of Canadian dollars, except where indicated -- unaudited)

		October 1 to December 31						January 1 to December 31
			2015			2014			2015			2014
Operating activities
Earnings		$	(15	)	$	43		$	104		$	259
Adjustments
	Amortization		50			43			191			170
	Finance expense		6			6			29			26
	Exchange loss on long-term debt		15			12			67			29
	Fair value adjustment to power agreements		3			2			32			2
	Tax provision		11			27			52			116
	Income taxes paid		(5	)		(14	)		(67	)		(68	)
	Post-retirement expense		20			13			71			54
	Contributions to post-retirement benefit plans		(34	)		(27	)		(78	)		(69	)
	Other		(7	)		(4	)		(21	)		(29	)
Changes in non-cash working capital
	Receivables		20			25			1			3
	Inventories		(68	)		(60	)		(16	)		(28	)
	Prepaid expenses		2			7			(4	)		-
	Payables and accrued liabilities		(26	)		(32	)		(60	)		10
Cash flows from operating activities			(28	)		41			301			475

Financing activities
Repayment of long-term debt			-			(339	)		-			(339	)
Proceeds from long-term debt			-			339			-			339
Proceeds from operating loans			137			61			68			106
Finance expense paid			(10	)		(10	)		(22	)		(22	)
Dividends			(6	)		(6	)		(23	)		(24	)
Common share repurchases			-			(18	)		(60	)		(111	)
Other			-			(3	)		(1	)		(4	)
Cash flows from financing activities			121			24			(38	)		(55	)

Investing activities
Acquisitions			(76	)		(5	)		(76	)		(208	)
Additions to capital assets			(51	)		(89	)		(220	)		(410	)
Government assistance			4			4			4			17
Other			(1	)		-			4			(9	)
Cash flows from investing activities			(124	)		(90	)		(288	)		(610	)

Change in cash			(31	)		(25	)		(25	)		(190	)
Foreign exchange effect on cash			12			3			24			13
Cash - beginning of period			3			7			(15	)		162
Cash - end of period		$	(16	)	$	(15	)	$	(16	)	$	(15	)

Cash consists of
Cash and short-term investments								$	13		$	21
Cheques issued in excess of funds on deposit									(29	)		(36	)
								$	(16	)	$	(15	)

West Fraser Timber Co. Ltd.
Notes to Condensed Consolidated Interim Financial Statements
(figures are in millions of dollars, except where indicated -- unaudited)

1. Nature of operations

West Fraser Timber Co. Ltd. ("West Fraser", "we", "us" or "our") is a diversified wood products company producing lumber, LVL, MDF, plywood, pulp, newsprint, wood chips and energy with facilities in western Canada and the southern United States. Our executive office is located at 858 Beatty Street, Suite 501, Vancouver, British Columbia. West Fraser was formed by articles of amalgamation under the Business Corporations Act (British Columbia) and is registered in British Columbia, Canada. Our Common shares are listed for trading on the Toronto Stock Exchange under the symbol WFT.

2. Basis of presentation

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 -- Interim Financial Reporting and using the same accounting policies and methods of their application as the December 31, 2015 annual audited consolidated financial statements and their accompanying notes ("Financial Statements"). These condensed consolidated interim financial statements should be read in conjunction with our 2015 Financial Statements.

3. Inventories

Inventories at December 31, 2015 were written down by $21 million (September 30, 2015 -- $37 million; December 31, 2014 -- $5 million) to reflect net realizable value being lower than cost.

4. Other

	October 1 to December 31						January 1 to December 31
		2015			2014			2015			2014
Foreign exchange gain on working capital	$	9		$	5		$	28		$	13
Foreign exchange gain on intercompany financing		1			2			9			5
Foreign exchange loss on long-term debt		(15	)		(12	)		(67	)		(29	)
Writedown of investment		(7	)		-			(7	)		-
Fair value adjustment to power agreements		(3	)		(2	)		(32	)		(2	)
Gain on asset sales		1			1			2			3
Other		(2	)		(1	)		3			5
	$	(16	)	$	(7	)	$	(64	)	$	(5	)

5. Tax provision

The tax provision differs from the amount that would have resulted from applying the Canadian statutory income tax rates to earnings before tax as follows:


	October 1 to December 31						January 1 to December 31
		2015			2014			2015			2014
Income tax expense at statutory rate of 26%	$	2		$	(19	)	$	(40	)	$	(98	)
Non-taxable amounts		(8	)		(7	)		(1	)		(11	)
Rate differentials between jurisdictions and on specified activities		1			(2	)		5			(8	)
Unrecognized capital losses		(6	)		-			(9	)		-
Increase in Alberta statutory tax rate		-			-			(7	)		-
Other		-			1			-			1
Tax provision	$	(11	)	$	(27	)	$	(52	)	$	(116	)

6. Earnings per share

Basic earnings per share is calculated based on earnings available to Common shareholders, as set out below, using the weighted average number of Common shares and Class B Common shares outstanding.

Diluted earnings per share is calculated based on earnings available to Common shareholders adjusted to remove the actual share option (recovery) expense charged to earnings and after deducting a notional charge for share option expense assuming the use of the equity-settled method, as set out below. The diluted weighted average number of shares is calculated using the treasury stock method. When earnings available to Common shareholders for diluted earnings per share are greater than earnings available to Common shareholders for basic earnings per share, the calculation is anti-dilutive and diluted earnings per share are deemed to be the same as basic earnings per share.


	October 1 to December 31						January 1 to December 31
		2015		2014				2015			2014
Earnings
Basic	$	(15	)	$	43		$	104		$	259
Share option (recovery) expense		20			27			(26	)		36
Equity settled share option
adjustment		-			(1	)		(3	)		(3	)
Diluted	$	5		$	69		$	75		$	292

Weighted average number of
shares (thousands)
Basic		82,455			83,687			83,104			84,742
Share options		1,074			1,406			1,295			1,430
Diluted		83,529			85,093			84,399			86,172

Earnings per share (dollars)
Basic	$	(0.18	)	$	0.51		$	1.25		$	3.06
Diluted	$	(0.18	)	$	0.51		$	0.89		$	3.06

7. Segmented information


								Pulp &			Corporate
			Lumber			Panels		paper			& other				Total
October 1, 2015 to December 31, 2015

Sales
	To external customers	$	656		$	137		$	220		$	-		$	1,013
	To other segments		28			2			-			-
		$	684		$	139		$	220		$	-

Operating earnings before amortization		$	55		$	19		$	17		$	(23	)	$	68
Amortization			(38	)		(3	)		(9	)		-			(50	)
Operating earnings			17			16			8			(23	)		18
Finance expense			(4	)		-			(2	)		-			(6	)
Other			(4	)		(1	)		2			(13	)		(16	)
Earnings before tax		$	9		$	15		$	8		$	(36	)	$	(4	)

October 1, 2014 to December 31, 2014

Sales
	To external customers	$	640		$	132		$	192		$	-		$	964
	To other segments		23			2			-			-
		$	663		$	134		$	192		$	-

Operating earnings before amortization		$	121		$	25		$	12		$	(32	)	$	126
Amortization			(31	)		(3	)		(9	)		-			(43	)
Operating earnings			90			22			3			(32	)		83
Finance expense			(4	)		(1	)		(1	)		-			(6	)
Other			4			-			1			(12	)		(7	)
Earnings before tax		$	90		$	21		$	3		$	(44	)	$	70

								Pulp &			Corporate
			Lumber			Panels		paper			& other				Total
January 1, 2015 to December 31, 2015

Sales
	To external customers	$	2,654		$	546		$	900		$	-		$	4,100
	To other segments		110			8			-			-
		$	2,764		$	554		$	900		$	-

Operating earnings before amortization		$	243		$	95		$	80		$	22		$	440
Amortization			(138	)		(13	)		(39	)		(1	)		(191	)
Operating earnings			105			82			41			21			249
Finance expense			(18	)		(3	)		(8	)		-			(29	)
Other			9			(3	)		(5	)		(65	)		(64	)
Earnings before tax		$	96		$	76		$	28		$	(44	)	$	156

January 1, 2014 to December 31, 2014

Sales
	To external customers	$	2,526		$	518		$	812		$	-		$	3,856
	To other segments		96			8			-			-
		$	2,622		$	526		$	812		$	-

Operating earnings before amortization		$	465		$	78		$	83		$	(50	)	$	576
Amortization			(114	)		(14	)		(41	)		(1	)		(170	)
Operating earnings			351			64			42			(51	)		406
Finance expense			(16	)		(3	)		(7	)		-			(26	)
Other			15			1			8			(29	)		(5	)
Earnings before tax		$	350		$	62		$	43		$	(80	)	$	375


The geographic distribution of external sales is as follows¹:
		October 1 to December 31				January 1 to December 31
		2015		2014		2015		2014
Canada	$	229	$	210	$	898	$	894
United States		577		521		2,249		1,997
China		110		147		580		598
Other Asia		75		66		299		274
Other		22		20		74		93
	$	1,013	$	964	$	4,100	$	3,856