Global Forest and Paper Industry: Net Earnings Summary

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Three months ended December 31, 2017

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 higher net earnings in the fourth quarter of 2017 compared to the fourth quarter of 2016. 

The recent currency average in Q4 was $0.79, down from Q3 of $0.80 and up from the Q4 2016 average of $0.75. 

The average price of Western SPF 2x4s in Q4 was US $503 per thousand board feet (mfbm), up from US $405 per mfbm in Q3 2017 and US $316 per mfbm in Q4 2016. The average price of Southern Pine 2x4s in Q4 was US $589 per mfbm, lower than the Q3 price of US $382 mfbm and Q4 2016 average price of US $432. The Q4 average price of OSB (7/16”, N.C.) was US $405 per thousand square feet (msf), up from US $409 msf in Q3 2017 and US $285 per msf Q4 2016 average. The Q4 average price of Plywood (Southern 3/8”) was US $385 per msf, up from US $320 msf in Q3 2017 and the Q4 2016 average of US $284 per mfbm. Average softwood pulp (NBSK, Europe) prices were US $1130/tonne, up from US $900/tonne in Q3 2017 and US $810/tonne in Q4 2016. Hardwood pulp (BEK, Europe) average prices were US $1030, up from US $890/ tonne in Q3 2017 and US $656/tonne in Q4 2016.

The reported seasonally adjusted US housing starts for December 2017 were 1.207 million units1, up 4.14% from the 1.159 million annualized starts reported in September 2017 and down 4.81% from the 1.268 million units reported in December 2016.

Western Canadian based companies posted net earnings of $510.4 million in the fourth quarter of 2017, compared to net earnings of $302.3 million in the third quarter of 2017 and net earnings of $271.2 million in the fourth quarter of 2016.  West Fraser reported quarterly earnings of $207.0 million, compared to $120.0 million in the third quarter of 2017 and $79.0 million in the fourth quarter of 2016.

Eastern Canadian based companies posted net earnings of $277.0 million in the fourth quarter of 2017, compared to net earnings of $227.9 million in the third quarter of 2017 and net earnings of $16.3 million in the fourth quarter of 2016. Norbord reported quarterly earnings of $203.4 million, compared to $162.8 in the previous quarter, and $81.4 million in Q4 2016. Cascades reported Q4 2017 earnings of $57.0 million, up from $35.0 million in the previous quarter. Cascades stated that Q4 results were driven by solid performances from containerboard division and European subsidiary Reno de Medic.

[1] US Census Bureau

Net Earnings (Loss):  Western Canada

   

$ millions

 

 

 

Company

Q4 2017

Q3 2017

Q4 2016

West Fraser

$207.0

$120.0

$79.0

Canfor

152.6

72.6

44.2

Interfor

36.2

16.8

26.6

Western Forest Products

18.9

13.6

36.2

Mercer International

53.0

26.5

24.7

Conifex

7.9

6.2

5.1

Fortress Paper Ltd

(74.2)

(14.3)

(7.3)

Total CAD

$401.4

$241.4

$208.5

       
       
       
       
       

Net Earnings (Loss):  Eastern Canada

   

$ millions

 

 

 

Company

Q4 2017

Q3 2017

Q4 2016

Cascades

$57.0

$35.0

$4.0

Norbord

203.4

162.8

81.4

Resolute Forest Products

16.5

30.1

(60.0)

Total CAD

$277.0

$227.9

$25.3

 

United States

Nine of the largest US-based forest and paper companies reported net earnings of US $3.62 billion in the fourth quarter of 2017, compared to earnings of US $1.65 billion in the third quarter of 2017 and earnings of US $1.67 billion in the fourth quarter of 2016. All of the US-based companies were impacted by the US Tax Reform Act to some extent.

WestRock reported net earnings of US $1.13 billion compared to US $195.3 million in the previous quarter and US $78.5 million in the fourth quarter of 2016. An income tax benefit of US $1.07 billion is a key driver of the quarterly result.

Domtar reported a loss of US $340.0 million, compared to earnings of US $70.0 million in the previous quarter and US $47.0 million in Q4 2016. Domtar stated that a component of the loss was a non-cash goodwill impairment of US $578.0 million.

 

Net Earnings (Loss):  United States

   

US $ millions

 

 

 

Company

Q4 2017

Q3 2017

Q4 2016

Kimberly-Clark

$625.0

$567.0

$518.0

International Paper

1,460.0

395.0

219.0

Packaging Corp. of America

268.9

139.1

110.6

Weyerhaeuser

271.0

130.0

551.0

WestRock

1,133.5

195.3

78.5

Sonoco

5.7

72.8

105.0

Graphic Packaging

173.9

47.3

34.9

Domtar

(340.0)

70.0

47.0

Boise Cascade Co

19.1

31.7

4.1

Total USD

$3,617.1

$1,648.2

$1,668.1

 

Europe

Eight of the largest European based forest and paper companies reported net earnings of € 1.01 billion for the fourth quarter of 2017, compared to earnings of € 937.6 million in the third quarter of 2017 and € 789.3 million reported in the fourth quarter of 2016. Stora Enso reported earnings of €173.0, compared to €191.0 in the previous quarter and €56.0 in Q4 2016. Stora Enso stated Q4 2017 as the fourth consecutive quarter of sales growth.

 

Net Earnings (Loss):  Europe

     

€ millions

 

 

 

Company

Q4 2017

Q3 2017

Q4 2016

UPM-Kymmene

€ 244.0

€ 286.0

€ 187.0

Svenska Cellulosa (SCA)

60.9

65.6

162.3

Metsä Group

124.5

39.3

68.2

Stora Enso

173.0

191.0

56.0

Smurfit Kappa

120.0

128.0

106.0

Holmen

33.9

47.7

45.3

Mayr-Melnhof Group

41.7

41.4

37.9

The Navigator Company

62.0

49.8

83.2

Total EUR

€ 860.0

€ 848.8

€ 745.9


Rest of the World:  Japan and Emerging Markets

Six of the largest forest and paper companies in Japan posted net earnings of US $351.5 million in the fourth quarter of 2017, compared to earnings of US $408.7 million in the third quarter of 2017 and US $416.2 million in the fourth quarter of 2016. Oji Holdings Corporation reported earnings of US $138.9 million in the fourth quarter of 2017, compared to earnings of US $113.4 million in the third quarter of 2017 and US $148.4 million in the fourth quarter of 2016.

In the Emerging Markets regions, five of the largest forest and paper companies reported net earnings of US $348.6 million in the fourth quarter of 2017, compared to earnings of US $827.7 million in the third quarter of 2017 and net loss of US $158.0 million in the fourth quarter of 2016.

Fibria Celulose reported fourth quarter earnings of US $86.2 million, compared to US $235.2 million in the third quarter of 2017 and a loss of US $27.9 million in the fourth quarter of 2016. The average exchange rate for Real to USD in the fourth quarter of 2017 was $0.31, compared to $0.32 in Q3 2017, and $0.30 in Q4 2016.
 

Net Earnings (Loss): Japan

     

US $ millions

 

 

 

Company

Q4 2017

Q3 2017

Q4 2016

Sumitomo Forestry

$50.9

$84.2

$54.1

Nippon Paper Industries Co.

22.4

(10.0)

(21.3)

Oji Holdings Corp

138.9

113.4

148.4

Unicharm Corporation

83.6

185.0

145.8

Rengo

48.7

6.6

57.2

Daio Paper

7.0

29.5

32.0

Total USD

$351.5

$408.7

$416.2

       
       
       
       

Net Earnings (Loss): Emerging Markets

   

US $ millions

 

 

 

Company

Q4 2017

Q3 2017

Q4 2016

Suzano Pulp & Paper (Brazil)

$110.2

$253.4

($133.7)

Fibria Celulose (Brazil)

86.2

235.2

(27.9)

Sappi (South Africa)

63.0

102.0

90.0

Arauco (Chile)

83.2

148.4

75.8

Empresas CMPC  (Chile)

6.0

88.7

(162.2)

Total USD

$348.6

$827.7

($158.0)


 


Previous quarter reports

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

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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