According to PwC’s Net Earnings Summary, Canadian forest products companies reported mixed earnings for the second quarter of 2014, with integrated producers, especially those with a building products focus, reporting the strongest results.
US housing starts statistics for June were about 6% below the average year-to-date trend. Due to the continued slow recovery in the US, 2014 is expected to become the seventh consecutive year in which US housing starts remain below the 1,000,000 unit level. Lumber prices were down slightly from the first quarter, while panel (OSB and plywood) prices remained more or less consistent with the previous quarter. Softwood pulp prices were fairly stable while hardwood pulp continued to decline in most markets. Newsprint prices remained stable despite weak export markets and paper prices were mixed.
Western Canadian based companies posted net earnings of $180.4 million in the second quarter of 2014, up from net earnings of $161.7 million in the first quarter but down from net earnings of $383.8 million in the first quarter of 2013.
Eastern Canadian based companies posted net losses of $42.0 million in the quarter, compared to net losses of $76.4 million in the first quarter of 2014 and net earnings of $3.0 million in the second quarter of 2013.
