West Fraser Timber Co. Ltd. reported results for the 3Q 2020. Sales increased by 32% to $1,690 million in the quarter. 3Q 2020 Adjusted EBITDA increased to $605 million from $184 million in the 2Q 2020.
Lumber segment generated operating earnings in the 3Q 2020 of $454 million (2Q 2020 - $66 million) and Adjusted EBITDA of $552 million (2Q 2020 - $156 million). The improvement was due primarily to higher lumber prices and SYP shipment volumes, partially offset by lower SPF shipment volumes. Higher lumber prices increased Adjusted EBITDA by $424 million compared to the previous quarter. The combination of lower manufacturing costs, increases in variable compensation expense, and slightly lower shipment volumes resulted in a $28 million offset to Adjusted EBITDA. Lumber segment operated near capacity during the current quarter compared with the 2Q where temporary curtailments reduced SPF and SYP production by approximately 170 MMfbm.
West Fraser is a diversified wood products company producing lumber, LVL, MDF, plywood, pulp, newsprint, wood chips, other residuals, and energy with facilities in western Canada and the southern United States.
