Sales and earnings up at West Fraser
West Fraser Timber Co., the Vancouver, British Columbia-based forest products company, reported second quarter sales of $1.705 billion, up 4.8 percent from $1.627 billion in the first quarter of 2024.
Second quarter earnings were $105 million, up 200 percent from $35 million in the first quarter of 2024.
“Once again our North American OSB, plywood and other engineered wood products demonstrated strong results and the value of our product diversification strategy,”said Sean McLaren, West Fraser's President and CEO.
“[The second quarter] benefited from relative strength in new home construction demand that carried over from the prior quarter. Conversely, we continued to experience demand softness in our North American lumber business, particularly for [southern yellow pine] lumber with its greater relative exposure to repair and remodelling applications.”
The company expressed optimism for the medium term.
Improved housing affordability from stabilization of inflation and interest rates, a large cohort of the population entering the typical home buying stage, and an aging U.S. housing stock are expected to drive new home construction and repair and renovation spending that supports lumber, plywood and OSB demand, the company said.
The company added: “Although central bankers across North America have indicated that rates may be higher for longer, the latest rate hiking cycle appears to be over with U.S. Federal funds futures recently indicating prospects for approximately two rate cuts in the second half of 2024. However, demand for new home construction and our wood building products may decline in the near term should the broader economy and employment slow or the trend in interest rates negatively impact consumer sentiment and housing affordability.”
