Stella-Jones Inc. announced financial results for its 3Q ended September 30, 2017. Sales reached $517.6 million, up 1% from $512.6 million last year. Acquisitions contributed sales of approximately $2.1 million, while the conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones’ reporting currency, versus the U.S. dollar, had a negative impact of $9.9 million on the value of U.S. dollar denominated sales. Excluding these factors, sales increased by $12.9 million, or 2.5%.

3Q 2017 operating income stood at $63.1 million, or 12.2% of sales, compared with $67.3 million, or 13.1% of sales in the 3Q of the previous year. The decrease as a percentage of sales essentially reflects lower selling prices for railway ties and a less favourable geographical mix in the utility pole category.

Net income for the 3Q 2017 was $42 million, versus $45.7 million in the 3Q 2016.

Brian McManus, President and CEO, said: “Stella-Jones’ growing reach in the utility pole and residential lumber markets led to solid sales growth in these product categories during the 3Q, more than offsetting the effect of lower year-over-year pricing in the railway tie product category. Furthermore, a strong operating cash flow generation allowed us to significantly reduce our long-term debt and positions us for future expansion.”

For the nine-month period ended September 30, 2017, sales amounted to $1.51 billion, versus $1.50 billion for the corresponding period a year earlier.

Operating income reached $178.4 million, or 11.8% of sales, compared with $205.1 million, or 13.7% of sales, last year. Net income totalled $116.8 million, versus $135.4 million in the prior year.

Stella-Jones Inc. is a leading producer and marketer of pressure treated wood products.

In the 3Q, Acadian Timber Corp. generated net sales of $22.2 million, compared to $19.3 million in the prior year period primarily due to a 20% increase in log sales volumes.

Adjusted EBITDA margin increased to 30% from 27% in the prior year period as the benefits of higher log sales volumes and stronger sales of higher and better use (HBU) land in Maine were partially offset by higher operating costs due to longer average haul distances.

Net income for the 3Q 2017 totaled $9.7 million, or $0.58 per share, compared to $2.8 million, or $0.17 per share, respectively, for the same period in 2016. The increase is primarily due to higher Adjusted EBITDA as described above and favourable foreign exchange revaluation of long-term debt.

“Demand across Acadian’s sawtimber and hardwood pulpwood markets remained strong during the third quarter,” said Mark Bishop, CEO of Acadian. “While seasonally drier than normal summer weather supported strong third quarter log production, annual harvest levels will continue to reflect our long term sustainable targets.”

During the first nine months of 2017, Acadian’s net sales were $57.9 million, reflecting an improvement over the prior year period of $54.4 million primarily attributed to a 15% increase in log sales volumes from favourable harvest conditions throughout the year, particularly for spruce and fir stands.

This positive impact was partially offset by a 3% decrease in the weighted average log selling price driven by weaker sawlog and pulpwood pricing. Adjusted EBITDA improved to $17.3 million from $15.5 million during this period while the Adjusted EBITDA margin improved to 30% from 28% benefiting from the aforementioned sales volume increase as well as higher HBU land sales in Maine.

For the nine months ended September 30, 2017, net income improved to $18.5 million, or $1.10 per share, representing an increase of $5.5 million over the prior year period primarily due to higher Adjusted EBITDA as described above and favourable foreign exchange revaluation of U.S. dollar denominated long-term debt.

Acadian Timber Corp. is a leading supplier of primary forest products in Eastern Canada and the Northeastern U.S.

Boise Cascade reports 3Q net income of $31.7 million on sales of $1.23 billion Boise Cascade Company reported net income of $31.7 million, or $0.81 per share, on sales of $1.23 billion for the 3Q ended September 30, 2017. 3Q 2016 net income of $10 million, or $0.26 per share, included a $9.5 million pre-tax loss on debt extinguishment, or a $0.15 per share after-tax impact.

“Distribution posted an exceptional quarter, with excellent execution and tailwinds from a strong commodity price environment. Improved results in Wood Products were driven by strong plywood prices and the impact of previously announced EWP price increases. The catastrophic storms in the southern U.S. created incremental plywood demand, and our sales and operations teams did a great job of responding to customer needs,” commented Tom Corrick, CEO. “We expect to experience seasonally slower demand in the 4Q, and commodity pricing will be subject to downside risks. We remain well positioned to support single-family housing starts growth that continues to post solid year-over-year gains.”

In 3Q 2017, total U.S. housing starts increased by approximately 1%, compared to the same period last year, driven by an approximate 11% increase in single-family starts, offset by an approximate 18% decrease in multi-family starts. Single-family residential construction is the primary demand driver of our sales. On a year-to-date basis, total U.S. housing starts improved 3%, compared to the same period last year, driven by an approximate 9% increase in single-family starts.

Boise Cascade Company is one of the largest producers of engineered wood products and plywood in North America and a leading U.S. wholesale distributor of building products.

Raute Corporation has received orders worth over Euro 21 million for the machinery and equipment for the expansion of UPM Plywood’s mill in Chudovo, Russia.

The scope of delivery includes the main machinery and equipment of the plywood manufacturing process: veneer peeling, drying, composing and patching lines, and also plywood lay-up, pressing and overlaying lines. The deal also includes machine vision and moisture analyzers.

The deliveries will take place during the autumn 2018 and production with the new lines will start during the year 2019. The machinery and equipment will be manufactured at Raute’s Nastola and Kajaani plants in Finland.

The machinery and equipment ordered from Raute are a part of the Chudovo mill investment program, through which the annual capacity of the mill will be increased up to 155,000 cubic meters.

Raute is a technology and service company that operates worldwide. Raute’s customers are companies operating in the wood products industry that manufacture veneer, plywood, LVL (Laminated Veneer Lumber) and sawn timber.

For the 3Q 2017, Louisiana-Pacific Corporation (LP) reported net sales of $718 million, up from $596 million in the same quarter of 2016. 3Q 2017 income from continuing operations was $111 million, compared to $66 million for the 3Q 2016.

Adjusted EBITDA from continuing operations for the 3Q 2017 was $192 million compared to $111 million in the 3Q 2016.

“We had our strongest 3Q performance in 12 years,” said Brad Southern, CEO. “The key drivers to our earnings improvement for the quarter were OSB and siding pricing, as well as LP product mix and an increase in volume.”

For the nine months ended September 30, 2017, LP reported net sales of $2 billion, compared to $1.7 billion in the first nine months of 2016.

For the first nine months of 2017, LP reported income from continuing operations of $260 million, or $1.78 per diluted share, compared to $108 million, or $0.74 per diluted share, for the same period in 2016.

Adjusted EBITDA from continuing operations for the first nine months of 2017 was $468 million, compared to $262 million for 2016.

Louisiana-Pacific Corporation is a leading manufacturer of quality engineered wood building materials including OSB, structural framing products, and exterior siding for use in residential, industrial and light commercial construction.

Photo: Brad Southern, CEO Louisiana-Pacific Corporation (LP)

Cairngorm Capital Partners LLP has acquired Thornbridge Sawmills Limited (Thornbridge), a leading Scottish timber processing and distribution company.

Thornbridge sources certified timber and sheet materials from sustainable producers both domestically and overseas. It has a combined sawmill and distribution hub in Grangemouth, as well as 8 regional branch outlets across Scotland serving builders, joiners and construction companies.

To support the existing management team, Jim Faulds and John Declerck will join Thornbridge’s board as Chairman and non-executive director respectively, contributing considerable expertise in the buildings materials sector.

Established in 1992, Thornbridge is a direct importer of timber and sheet materials.

Cairngorm Capital Partners LLP is a specialist private investment firm providing equity capital and management expertise to leading UK companies.

Metsä Group’s sales in January–September 2017 were Euro 3,712 million, compared to Euro 3,483 million in January–September 2016. The growth in sales was primarily the result of greater delivery volumes.

The comparable operating result was Euro 381 million, or 10.3% of sales. The operating result improved compared to the previous year due to the positive development in the pulp and paperboard operations. Higher sales volumes improved the operating result in tissue and cooking papers.

Metsä Group’s operating result (IFRS) was Euro 397 million, compared to Euro 333 million in January–September 2016.

Sales in the 3Q 2017 totalled Euro 1,260 million, whereas sales for the corresponding period last year were Euro 1,143 million. The comparable operating result was Euro 134 million. 3Q 2017 operating result increased to Euro 143 million, compared to Euro 107 million in 3Q 2016.

President and CEO Kari Jordan said: “Metsä Group’s profitability during the first three quarters in 2017 was better than in the previous year. In particular, the result improved by higher paperboard delivery volumes and rises in pulp prices.”

Metsä Group is a forerunner in sustainable bioeconomy utilising renewable wood from sustainably managed northern forests. Metsä Group focuses on wood supply and forest services, wood products, pulp, fresh fibre paperboards and tissue and cooking papers.

The John Deere 900M-Series Tracked Feller Bunchers and 900MH-Series Harvesters are now equipped with Final Tier 4 (FT4) engines, offering fuel and fluid-efficient machines without sacrificing power and performance. John Deere is the leader in FT4 technology, offering a diesel particulate filter (DPF) solution that is known for its ability to reduce the dependency of diesel exhaust fluid (DEF). Built on decades of John Deere engine experience and millions of hours of FT4 runtime, the 900M-Series and 900MH-Series machines deliver premium performance, optimum fluid efficiency, increased reliability and economical operating costs.

“Out in the woods, machine productivity and uptime are crucial to business success. Our FT4 engine and emission solutions have been rigorously tested and in the most extreme applications, loggers can be confident that their tracked feller buncher or harvester can withstand even the most challenging conditions,” said Jim O’Halloran, product marketing manager for John Deere. “As a proven partner offering the most comprehensive solutions in the industry, John Deere is proud to offer loggers a powerful, reliable machine that meets current and future emissions standards.”

With the required emissions change, John Deere FT4 engines maintain power density, torque, and transient response – which results in productivity, uptime, and more value for your machines. In addition to excellent fuel economy, the design of the engine after-treatment system results in exceptionally low Diesel Exhaust Fluid (DEF) usage. “DEF usage has become a real input into the planning and cost of the overall equipment operation,” says O’Halloran. “We have to talk about overall fluid economy now, and if you use less fluid, there is less handling and storage requirements. It’s a real positive factor in the efficiency and overall bottom line of our Customers.”

John Deere has also made changes to the machine line-up, and improving the structure, design and horsepower on select machines. John Deere offers three 900M-Series tracked feller buncher models, the 903M, 953M flat bottom and 959M leveling machines, as well as two 900MH-Series harvesters, the 953MH flat bottom and 959MH leveling machines. All of the 900M-Series and 900MH-Series machines feature a redesigned engine enclosure, improving structural strength while maintaining the excellent serviceability that John Deere machines are known for. In addition to all of the 900M-Series and 900MH-Series machines now boasting 330 horsepower, the 959M Feller Buncher and 959MH Harvester continue to have best in class leveling envelope, maximizing operator comfort and performance requirements in demanding steep slope logging applications.

Other updates include an improved LED work lighting option, and the expansion of the Disc Saw Felling Head option availability. This includes the 22-inch felling head, which is now available for all of the 900M-Series tracked feller bunchers.

Dubbed “The Wall of Wood”, it is the result of a spike in planting in the 1990s when log prices soared. Most wood is exported as logs, mainly to China, and Napier Port has made changes to the way it operates to accommodate the increase, including the ability to load logs from four berths.

Port commercial manager Andrew Locke said the volume had quadrupled since 2000. “We have gone from 400,000 tonnes to 1.6 million tonnes,” he said. “Within eight years we will be at 3 million tonnes and I think that is a very conservative number.”

“About 95 per cent of what we handle via Napier Port is on the truck and last year about 200,000 tonnes on rail. We think that will grow. We are working with the Wairoa rail option at the moment to try and take some trucks off the road. We think long term, we might get 300,000 to 350,000 tonnes on rail.”

The wood sector has faced criticism about its lack of wood processing facilities in the region, but Mr Locke said it was a major economic contributor. “The latest number is $100 million that the forest sector brings to the Hawke’s Bay community.”

He said the largest forestry company, Pan Pac, which produces timber and wood pulp, ships 800,000 tonnes of cargo through Napier Port annually and employed more than 45 people. “The multiplier effect is a very large number.”

Source: nzherald.co.nz