Canadian lumber producers boosted by U.S. housing upswing

Posted by Rumin Mann
February 18th, 2013

The sawmills of three major Canadian lumber producers are expected to enjoy brisk orders this year, especially as housing markets in the United States perk up.

West Fraser Timber Co. Ltd., Canfor Corp. and International Forest Products Ltd., which report their fourth-quarter results this week, have regained their swagger during the long road to recovery over the past four years.

B.C. Interior sawmills operated by West Fraser, Canfor and Interfor are working their way through limited timber inventories that must be processed after mountain pine beetles decimated forests in the region, but there is an abundance of wood supply in the U.S. Southeast, said Mark Kennedy, an analyst with CIBC World Markets Inc.

Interfor will release its fourth-quarter earnings on Thursday, while West Fraser and Canfor will announce their financial results on Friday. Analysts forecast the three Vancouver-based companies will generate impressive margins for earnings before interest, taxes, depreciation and amortization (EBITDA) because lumber prices climbed sharply in the final quarter of 2012.
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