Selective Cuttings

Selective Cuttings

2012 financial results of Canadian forest sector

April 16, 2013

Analysis of the 2012 financial results of the largest publicly traded Canadian forest sector firms indicate that companies with major exposure to solid wood products significantly improved their performance, while companies with more exposure to pulp and paper products posted either declining or negative net income. In 2012, the ten largest publicly traded Canadian forest companies, measured by revenue, were: Canfor, Cascades, Catalyst, Domtar, Mercer, Norbord, Resolute, Tembec, West Fraser and Western FP.   Cumulatively, they reported a net income of $871 million, compared with a net loss of $378 million in 2011 (see figure).

Financial results of the largest Canadian publicly traded forest companies1

This chart shows the annual financial results of select Canadian forest companies, including the comparison of 2010, 2011and 2012. Six of the ten largest Canada-based publicly traded forest products companies posted positive net earnings in 2012. In 2012, the ten largest publicly traded Canadian forest companies reported a net income of $871 million, a significant improvement over the $378 million net loss reported in 2011.

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Six of these 10 firms reported positive net earnings in 2012, the same number as in 2011.

The diverging trend for wood manufacturers and pulp and paper firms is driven by continued growth in Asian demand and on-going recovery in the U.S. housing sector driving wood product shipments and prices up, while demand for newsprint and other graphic papers continues to be challenged by falling demand as a result of the rise of electronic media. Both of these trends are expected to continue, and will likely continue to impact financial performance over the next few years.

12010 includes the Resolute/AbitibiBowater restructuring, which added $2.6 billion net income.