Wester Fraser Timber (TSX,NYSE:WFG) posted a $173 million loss in the second quarter despite revenues of $2.1 billion.
Sluggish pulp prices and unscheduled downtime at pulp mills accounted for a significant portion of the lower profits.
“Early in the second quarter of 2023, we continued to experience challenging demand markets, particularly in the pulp and paper segment where we managed through several unscheduled downtime events at our mills, including an extended maintenance shutdown at Hinton Pulp as well as curtailment of our Cariboo Pulp mill related to fibre supply constraints,” the company said in its second quarter financials today.
“Combined with declining pulp prices that led to a significant inventory write-down, the pulp and paper segment experienced higher losses than expected. Notwithstanding these challenges, we did see signs of demand improvement for some of our key wood building products as the quarter unfolded against a backdrop of mortgage rates well above year-ago levels.”
West Fraser second quarter revenues were US$1.608 billion ($2.1 billion Canadian), compared to US$1.627 billion in Q2 and US$2.887 billion in Q2 2022.
West Fraser posted record profits in 2022, when lumber prices were near record highs.