By: The Working Forest Staff
VANCOUVER – Acadian Timber Corp. reported solid financial and operating results for the three months ended June 24, 2017.
“Acadian’s second quarter benefited from favourable winter conditions which supported strong seasonal log production,” said Mark Bishop, CEO of Acadian. “Acadian continues to experience strong regional demand for hardwood logs and the outlook for softwood sawtimber continues to be supported by steady growth in U.S. housing starts and residential home improvement.”
Acadian generated adjusted EBITDA of $2.6 million, benefiting from strong seasonal demand, favorable operating conditions, and higher and better use land sales in Maine, according to the company statement. However, the Q2 2017 result was lower than the $3.3 million generated in the prior year period. While log sales volumes and the weighted average log selling price for the quarter were largely consistent year-over-year, operating costs increased primarily due to an increase in average haul distances, Acadian explains.
Acadian Timber supplies primary forest products in Eastern Canada and the Northeastern U.S. With a total of 2.4 million acres of land under management, Acadian is the third largest timberland operator in New Brunswick and Maine.
For the second quarter of 2017, Acadian generated net sales of $12.6 million compared to $13.7 million in the prior year primarily due to lower selling prices for biomass products.
During the first half of 2017, Acadian’s net sales were $35.7 million, reflecting a slight improvement over the same prior year period of $35.1 million, primarily attributed to an 11% increase in log sales volumes from favourable harvest conditions, particularly for spruce and fir stands.
Specifically for the company’s New Brunswick timberland operations, Acadian reports that the weighted average log selling price for the quarter was $70.13 per m3, compared to $70.84 per m3 in the prior year as strength in softwood sawlog selling prices and the benefit of sales mix was offset by weaker pricing for hardwood products.
Continued strong local demand for biomass products resulted in sales volumes remaining largely in-line with the same period of 2016. Overall, the gross margin earned on biomass products decreased 55 per cent compared to the second quarter of 2016 reflecting limited export markets for products, according to the company statement.
The company reports no recordable safety incidents among employees and contractors during the second quarter of 2017.