Global Forest and Paper Industry: Net Earnings Summary

Start adding items to your reading lists:
or
Save this item to:
This item has been saved to your reading list.

Three months ended March 31, 2018

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 first quarter of 2018 compared to the first quarter of 2017. The recent currency average in Q1 was $0.79, consistent with Q4 of $0.79 and up from the Q1 2017 average of $0.75.

The average price of Western SPF 2x4s in Q1 was US $513 per thousand board feet (mfbm), up from US $462 per mfbm in Q4 2017 and US $351 per mfbm in Q1 2017. The average price of Southern Pine 2x4s in Q1 was US $540 per mfbm, higher than the Q4 2017 price of US $438 mfbm and the Q1 2017 average price of US $460. The Q1 average price of OSB (7/16”, N.C.) was US $367 per thousand square feet (msf), down from US $379 per msf in Q4 up from US $295 msf in Q1 2017. The Q1 average price of Plywood (Southern 3/8”) was US $368 per msf, up from US $351 msf in Q4 2017 and from the Q1 2017 average of US $291 per mfbm. Average softwood pulp (NBSK, Europe) prices were US $1097/tonne, up from US $997/ tonne in Q4 2017 and from US $828/tonne in Q1 2017. Hardwood pulp (BEK, Europe) average prices were US $1020/tonne, up from US $970/ tonne in Q4 2017 and from US $709/tonne in Q1 2017.

The reported seasonally adjusted US housing starts for March 2018 were 1.327 million units, up from the 1.210 million annualized starts reported in December 2017 and from the 1.203 million units reported in March 2017.

Western Canadian based companies posted net earnings of $419.3 million in the first quarter of 2018, compared to net earnings of $401.6 million in the fourth quarter of 2017 and net earnings of $245.1 million in the first quarter of 2017. West Fraser reported quarterly earnings of $197.0 million, compared to $207.0 million in the fourth quarter of 2017 and $123.0 million in the first quarter of 2017. West Fraser indicated that transportation challenges were a significant factor for Q1 2018 results.

Eastern Canadian based companies posted net earnings of $193.8 million in the first quarter of 2018, compared to net earnings of $277.0 million in the fourth quarter of 2017 and net earnings of $163.6 million in the first quarter of 2017. Norbord reported quarterly earnings of $120.2 million, compared to $203.4 million in the previous quarter, and $64.8 million in Q1 2017. Cascades reported Q1 2018 earnings of $61.0 million, up from $57.0 million in the previous quarter. Consistent with the previous quarter, Cascades stated Q1 results were supported by strong performances from European subsidiary Reno de Medic.


Net Earnings (Loss): Western Canada
$ millions
Company Q1 2018 Q4 2017 Q1 2017
West Fraser $197.0 $207.0 $123.0
Canfor 141.5 152.6 77.5
Interfor  33.0 36.2 19.7
Mercer International 32.4 53.0 12.8
Western Forest Products 21.7 19.0 16.2
Conifex 2.5 8.0 (1.4)
Fortress Paper Ltd(8.8) (8.8) (74.2) (2.7)
Total CAD $419.3 $401.6 $245.1

Net Earnings (Loss): Eastern Canada
$ millions
Company Q1 2018 Q4 2017 Q1 2017
Norbord $120.2 $203.4 $64.8
Cascades 61.0 57.0 161.0
Resolute Forest Products 12.6 16.5 (62.2)
Total CAD $193.8 $277.0 $163.6

United States

Nine of the largest US-based forest and paper companies reported net earnings of US $1.03 billion in the first quarter of 2018, compared to earnings of US $3.62 billion in the fourth quarter of 2017 and earnings of US $1.28 billion in the first quarter of 2017. Fourth quarter earnings were affected by US tax reforms released in December 2017.

International Paper reported net earnings of US $103.0 million compared to US $1.46 billion in the previous quarter and US $211.0 million in the first quarter of 2017. The company attributed earnings resulting from their Ilim joint venture in Russia as a driver of the quarterly result.

Kimberly-Clark reported earnings of US $97.0 million, compared to earnings of US $625.0 million in the previous quarter and US $575.0 million in Q1 2017. Kimberly-Clark stated that Q1 results were driven by an increase in the price of input costs, and lower net selling prices.


Net Earnings (Loss): United States
US$ millions
Company Q1 2018 Q4 2017 Q1 2017
Weyerhaeuser $269.0 $271.0  $157.0
WestRock 224.5 1,133.5 98.2
Packaging Corp. of America 140.1 268.9 117.4
International Paper 103.0 1,460.0 211.0
Kimberly-Clark 97.0 625.0 575.0
Sonoco 74.9 5.7 54.3
Domtar 54.0 (340.0) 20.0
Boise Cascade Co 37.1 19.1 10.0
Graphic Packaging 29.1 173.9 37.0
Total USD $1,029.5 $3,617.1 $1,279.9

Europe

Seven of the largest European based forest and paper companies reported net earnings of € 944.2 million for the first quarter of 2018, compared to earnings of € 739.9 million in the fourth quarter of 2017 and € 789.6 million reported in the first quarter of 2017. Oceanwood Opportunities has entered into a sale and purchase agreement with Norske Skog to acquire all issued share capital. The acquisition is currently subject to regulatory approval.


Net Earnings (Loss): Europe
€ millions
Company Q1 2018 Q4 2017 Q1 2017
UPM-Kymmene € 309.0 € 244.0 € 240.0
Stora Enso 273.0 173.0 107.0
Metsä Group 146.3 124.5 106.7
Svenska Cellulosa(SCA) 70.1 60.9 212.4
The Navigator Company 53.2 62.0 35.6
Holmen 50.9 33.9 51.0
Mayr-Melnhof Group 41.7 41.7 36.9
Total EUR € 944.2 € 740.0 € 789.6

Rest of the world

Japan and Emerging Markets

Six of the largest forest and paper companies in Japan posted net earnings of US $480.0 million in the first quarter of 2018, compared to earnings of US $351.5 million in the fourth quarter of 2017 and US $603.1 million in the first quarter of 2017. Unicharm Corporation reported earnings of US $148.5 million in the first quarter of 2018, compared to earnings of US $83.6 million in the fourth quarter of 2017 and US $113.9 million in the first quarter of 2017.

In the Emerging Markets regions, five of the largest forest and paper companies reported net earnings of US $883.7 million in the first quarter of 2018, compared to earnings of US $348.6 million in the fourth quarter of 2017 and earnings of US $272.8 million in the first quarter of 2017.

Arauco reported first quarter earnings of US $197.7 million, compared to earnings of US $83.2 million in the fourth quarter of 2017 and a loss of US $45.3 million in the first quarter of 2017. The average exchange rate for Real to USD in the first quarter of 2018 was $0.31, consistent with Q4 2017, and down from $0.32 in Q4 2016. A number of large forest fires in Chile in January 2017 negatively affected Arauco’s Q1 2017 results. Arauco reported losses from forest fires of US $178.4 million in Q1 2017.


Net Earnings (Loss): Japan
US$ millions
Company Q1 2018 Q4 2017 Q1 2017
Sumitomo Forestry $181.2 $50.9 $188.5
Unicharm Corporation 148.5 83.6 113.9
Oji Holdings Corp 82.4 138.9 140.7
Rengo 68.9 48.7 (6.0)
Nippon Paper Industries Co. 8.0 22.4 122.9
Holmen 50.9 33.9 51.0
Daio Paper  (9.0) 7.0  43.1
Total USD $480.0 $351.5 $603.1

Net Earnings (Loss): Emerging Markets
US$ millions
Company Q1 2018 Q4 2017 Q1 2017
Suzano Pulp & Paper (Brazil) $250.5 $110.2 $143.3
Arauco (Chile) 197.7  86.2 (45.3)
Fibria Celulose (Brazil) 189.5 86.2 104.7
Empresas CMPC (Chile) 144.0 6.0 (17.9)
Sappi (South Africa) 102.0 63.0 88.0
Total USD $883.7 $348.6 $272.8

{{filterContent.facetedTitle}}

Contact us

Kevin Bromley
Partner
Tel: +1 604 806 7515
Email

Frédéric Bouchard
Partner
Tel: +1 514 205 5079
Email

Stay Connected: