Global Forest and Paper Industry: Net Earnings Summary

This Net Earnings Summary has been prepared by PwC based on financial statements and other sources issued by the selected companies. Earnings are reported in regional currencies, as noted.

Canada

The largest Western and Eastern Canadian based forest products companies reported overall lower net earnings in the third quarter of 2017 compared to the third quarter of 2016.  The forest fire season in British Columbia is considered to be one of the worst in the province’s history, with a provincial state of emergency lasting from July 7 to September 15, 2017 and several BC interior communities were evacuated.  The province of British Columbia estimates that approximately 1 million hectares of timber has been destroyed due to fires.  Throughout this period a number of BC based companies faced logging restrictions, transportation delays and mill closures.  

The average price of Western SPF 2x4s in Q3 was US $405 per thousand board feet (mfbm), up from $386 per mfbm in Q2 2017 and $321 per mfbm in Q3 2016. The average price of Southern Pine 2x4s in Q3 was US $382 per mfbm, lower than the Q2 price of US $452 mfbm and Q3 2016 average price of US $409. The Q3 average price of OSB (7/16", N.C.) was US $409 per thousand square feet (msf), up from US $330 msf in Q2 2017 and US $302 per msf Q3 2016 average.  The Q3 average price of Plywood (Southern 3/8”) was US $320 per msf, up from US $291 msf in Q2 2017 and the Q3 2016 average of US $305 per mfbm.

Average softwood pulp (NBSK, Europe) prices were US $900/tonne, up from US $872/tonne in Q2 2017 and US $810/tonne in Q3 2016. Hardwood pulp (BEK, Europe) average prices were US $890, up from US $820/tonne in Q2 2017 and $665/tonne in Q3 2016.

The reported seasonally adjusted US housing starts for September 2017 were 1.159 million units1, down 4.8% from the 1.217 million annualized starts reported in June 2017 and up 9.1% from the 1.062 million units reported in September 2016.  The Canadian/US dollar exchange rate has continued to stabilize. The recent currency average in Q3 was $0.80, up from Q2 of 2017 of $0.74 and the Q3 2016 average of $0.77.   

Western Canadian based companies posted net earnings of $241.4 million in the third quarter of 2017, compared to net earnings of $286.3 million in the second quarter of 2017 and net earnings of $242.6 million in the third quarter of 2016.  West Fraser reported quarterly earnings of $120.0 million, compared to $146.0 million in the second quarter of 2017 and $107.0 million in the first quarter of 2016.  Several of West Fraser’s operations in British Columbia were temporarily closed due to wildfires, reducing production in the quarter by 55 mmfbm of lumber and 15 msf of plywood. 

Eastern Canadian based companies posted net earnings of $227.9 million in the third quarter of 2017, compared to net earnings of $370.9 million in the second quarter of 2017 and net earnings of $122.1 million in the third quarter of 2016.  Norbord reported quarterly earnings of $162.8 million, compared to $130.5 million in the second quarter of 2017 and $71.8 million in the first quarter of 2016.  Norbord’s third quarter 2017 increase in net earnings is primarily due to higher North American oriented strand board (OSB) prices and shipment volumes.

Tembec did not release financial results for Q3 2017 due to an acquisition by US based Rayonier Advanced Materials. The transaction was completed on November 20, 2017.

[1] US Census Bureau

 

Net Earnings (Loss):  Western Canada

   

$ millions

 

 

 

Company

Q3 2017

Q2 2017

Q3 2016

West Fraser

$120.0

$146.0

$107.0

Canfor

72.6

90.9

66.4

Mercer International

26.5

(2.8)

15.6

Interfor

16.8

24.5

15.1

Western Forest Products

13.6

25.6

16.8

Conifex

6.2

4.2

1.4

Fortress Paper Ltd

(14.3)

(2.1)

20.3

Total CAD

$241.4

$286.3

$242.6

       

Net Earnings (Loss):  Eastern Canada

   

$ millions

 

 

 

Company

Q3 2017

Q2 2017

Q3 2016

Norbord

$162.8

$130.5

$71.8

Cascades

35.0

323.0

20.0

Resolute Forest Products

30.1

(99.5)

18.3

Tembec*

0.0

17.0

12.0

Total CAD

$227.9

$370.9

$122.1

*Tembec acquired by Rayonier Advanced Materials on November 20, 2017.

 

United States

Nine of the largest US-based forest and paper companies reported net earnings of US $1.65 billion in the third quarter of 2017, compared to earnings of US $1.26 billion in the second quarter of 2017 and earnings of US $1.32 billion in the third quarter of 2016.

Kimberly-Clark released net earnings of US $567.0 million resulting in the highest net income of the US-based companies for both the second and third quarters of 2017.

 

Net Earnings (Loss):  United States

   

US $ millions

 

 

 

Company

Q3 2017

Q2 2017

Q3 2016

Kimberly-Clark

$567.0

$540.0

$563.0

International Paper

395.0

80.0

309.0

WestRock

195.3

326.6

(91.7)

Packaging Corp. of America

139.1

143.2

119.3

Weyerhaeuser

130.0

$24.0

$227.0

Sonoco

72.8

43.7

66.0

Domtar

70.0

38.0

59.0

Graphic Packaging

47.3

42.0

57.8

Boise Cascade Co

31.7

22.2

10.0

Total USD

$1,648.2

$1,259.7

$1,319.4

 

Europe

Ten of the largest European based forest and paper companies reported net earnings of € 847.8 million for the third quarter of 2017, compared to earnings of € 644.5 million in the second quarter of 2017 and € 981.0 million reported in the third quarter of 2016.
 

Net Earnings (Loss):  Europe

     

€ millions

 

 

 

Company

Q3 2017

Q2 2017

Q3 2016

UPM-Kymmene

€ 286.0

€ 205.0

€ 268.0

Stora Enso

191.0

143.0

119.0

Smurfit Kappa

128.0

102.0

137.0

Svenska Cellulosa (SCA)

65.6

29.7

243.3

The Navigator Company

49.8

61.3

48.8

Holmen

47.7

40.7

41.5

Mayr-Melnhof Group

41.4

35.0

35.1

Metsä Group

39.3

86.1

67.8

Norske Skog

(1.0)

(58.3)

20.5

Total EUR

€ 847.8

€ 644.5

€ 981.0

 

Rest of the World:  Japan and Emerging Markets

Six of the largest forest and paper companies in Japan posted net earnings of US $408.7 million in the third quarter of 2017, compared to earnings of US $302.6 million in the second quarter of 2017 and US $280.5 million in the third quarter of 2016.  Unicharm Corporation reported earnings of US $185.0 million in the third quarter of 2017, compared to earnings of US $132.1 million in the second quarter of 2017 and US $126.7 million in the third quarter of 2016.  

In the Emerging Markets regions, five of the largest forest and paper companies reported net earnings of US $ 827.5million in the third quarter of 2017, compared to earnings of US $226.2 million in the second quarter of 2017 and earnings US $206.6 million in the third quarter of 2016.   Brazil based Suzano Pulp and Paper reported net earnings of US $253.3 million compared to earnings of $61.8 million in the second quarter of 2017. 

 

Net Earnings (Loss): Japan

     

US $ millions

 

 

 

Company

Q3 2017

Q2 2017

Q3 2016

Unicharm Corporation

$185.0

$132.1

$126.7

Oji Holdings Corp

113.4

$55.8

$3.1

Sumitomo Forestry

84.2

34.9

151.1

Daio Paper

29.5

6.5

23.4

Rengo

6.6

32.6

43.4

Nippon Paper Industries Co.

(10.0)

40.7

(67.2)

Total USD

$408.7

$302.6

$280.5

       

Net Earnings (Loss): Emerging Markets

   

US $ millions

 

 

 

Company

Q3 2017

Q2 2017

Q3 2016

Suzano Pulp & Paper (Brazil)

$253.3

$61.8

$16.3

Fibria Celulose (Brazil)

235.1

80.7

9.9

Arauco (Chile)

148.4

0.0

31.4

Sappi (South Africa)

102.0

58.0

112.0

Empresas CMPC  (Chile)

88.7

25.7

37.0

Total USD

$827.5

$226.2

$206.6


Previous quarter reports

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2017

Global Forest and Paper Industry: Net Earnings Summary — Three months ended March 31, 2017

Global Forest and Paper Industry: Net Earnings Summary — Three months ended December 31, 2016

Global Forest and Paper Industry: Net Earnings Summary — Three months ended September 30, 2016

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2016

Global Forest and Paper Industry: Net Earnings Summary — Three months ended March 31, 2016

Global Forest and Paper Industry: Net Earnings Summary — Three months ended December 31, 2015

Global Forest and Paper Industry: Net Earnings Summary — Three months ended September 30, 2015

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2015

Global Forest and Paper Industry: Net Earnings Summary — Three months ended March 31, 2015

Global Forest and Paper Industry: Net Earnings Summary — Three months ended December 31, 2014

Global Forest and Paper Industry: Net Earnings Summary — Three months ended September 30, 2014

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2014

Global Forest and Paper Industry: Net Earnings Summary — Three months ended March 31, 2014

Global Forest and Paper Industry: Net Earnings Summary — Three months ended December 31, 2013

Global Forest and Paper Industry: Net Earnings Summary — Three months ended September 30, 2013

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2013

Global Forest and Paper Industry: Net Earnings Summary — Three months ended December 31, 2012

Global Forest and Paper Industry: Net Earnings Summary — Three months ended September 30, 2012

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2012

Global Forest and Paper Industry: Net Earnings Summary — Three months ended March 31, 2012

Global Forest and Paper Industry: Net Earnings Summary — Three months ended September 30, 2011

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2011 

Global Forest and Paper Industry: Net Earnings Summary — Three months ended March 31, 2011

Global Forest and Paper Industry: Net Earnings Summary — Three months ended September 30, 2010

Global Forest and Paper Industry: Net Earnings Summary — Three months ended June 30, 2010

Global Forest and Paper Industry: Net Earnings Summary — Three months ended 31 March 2010

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