Staff
Ainsworth Lumber Co. Ltd. recently reported its financial results for the second quarter of 2011, indicating its OSB mill in Barwick recorded its highest volumes of production since its purchase in 2004.
“Despite persistently-challenging market conditions, Ainsworth achieved improvements in operational efficiency at our three OSB mills, and a marked increase in overseas sales volumes, as we worked to fulfill our commitment to supply our valued, long-term customers in Japan with the building materials they need to continue their recovery effort,” Ainsworth president and CEO Rick Huff said in a press release.
“The decision we made to implement strategic capital projects in the fourth quarter of 2010, which is typically a period of seasonally-lower demand, resulted in operational efficiency gains in the second quarter of 2011,” he added.
The company noted export market sales grew to 38 percent of total sales from seven percent in the second quarter of 2010.
However, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the second quarter of 2011 was $2.7 million, compared to $35.1 million in the same quarter of 2010.
The difference was primarily the result of significantly lower North American OSB pricing in the second quarter of 2011 compared to the second quarter of 2010, a period recognized for extraordinarily high North American OSB pricing.
For example, in the second quarter of 2011, the published benchmark North Central price for 7/16” oriented strand board (“OSB”) was $174 (U.S.) per msf (1,000 square feet)—a 41 percent decrease from an average quarterly price of$294 (U.S.) per msf in the second quarter of 2010.
The average Western Canadian published price for 7/16” OSB was $151 (U.S.) per msf in the second quarter of 2011, down 49 percent from $299 (U.S.) per msf in the same period of 2010.
Also in the second quarter of 2011, Ainsworth recorded a net loss from continuing operations of $12.9 million, compared to a loss of $17.3 million in the second quarter of 2010.
This decrease primarily is due to a $27.2-million increase in the unrealized foreign exchange gain on long-term debt, a $3.0-million decrease in amortization expense, a $1.1-million decrease in finance expense, and a $10.9-million increase in income tax recovery—partially offset by a $33.1-million decrease in gross profit, the company reported.
