Canadian lumber giant Interfor has reported a huge rebound in sales after an earlier COVID-19 setback.
According to the latest quarterly financials released on Thursday, the company sold $644.9 million worth of wood products during July, August and September — compared to $396.8 million worth of product in the previous three months.
Interfor shares are now trading at $16.35 compared to $5.04 when the pandemic was declared in B.C. on March 18.
According to the company, “While lumber prices fell sharply in the initial stages of COVID-19, industry-wide production curtailments in Q2’20 and growing demand from repair and renovation activities and U.S. housing starts contributed to the robust price environment during Q3’20.”
This has led to an increase in the price of 1,000 feet of board from $264 to $910 between the second and third quarters. The company was also able to increase the amount of lumber it has sold at these higher prices by 221 million board feet to 642 million board feet between the second and third quarters.
“Production in the B.C. region increased to 193 million board feet from 115 million board feet in the preceding quarter,” the company reported. “The U.S. South and U.S. Northwest regions accounted for 331 million board feet and 118 million board feet, respectively, compared to 230 million board feet and 76 million board feet in Q2’20.”
Interfor also reported that it had been approved to begin a 12-month share buyback scheme starting Nov. 11, 2020 to purchase up to six million shares at market price on the day.
The company believes that lumber demand will continue to grow over the midterm as repair and renovation activity continues in the U.S. and Canada
“While uncertainty remains as to the duration and extent of the economic impact from the COVID-19 pandemic, Interfor is well positioned with its strong balance sheet and significant available liquidity,’ the company reported.