Forest Products Industry Snapshot: Q3 2023 Financial Results Revealed
See the latest financial findings in the forest products industry...
Financial results from four large but different companies in the forest products world reflected decreased activity in the quarter ending September 30, 2023. All four reported profits, but International Paper, Weyerhaeuser, and Louisiana Pacific showed declines from the same quarter in 2022. Acadian Timber reported strength.
International Paper Company showed the greatest effect, which was unsurprising given the decline in paper and packaging demand. It showed a 15% decline in sales from the third quarter of 2022, and a decline in profits vs. the second quarter of 2022 and the same quarter last year.
Meanwhile, Weyerhaeuser saw a decrease in sales from its timberlands division, but recorded a “seasonal increase in harvest activity”, according to the company’s announcement. The company projected a significant increase in harvest volumes for its north division (which includes the Lake States) in the 4th Quarter.
Sales from Weyerhaeuser’s wood products division increased by 27% from the second quarter, mainly due to oriented strand board demand, but were down from the second quarter of 2022.
Growth in OSB demand was positive in the forest products world generally, as also shown in Louisiana Pacific’s results where prices for that product rose by 6%.
In the meantime, “siding inventories have normalized”, according to the company’s Chair and CEO Brad Southern. High inventories at a variety of different companies’ mills dried up demand throughout the Lake States during the third quarter.
Meanwhile, a company that operates in both U.S. and Canadian markets in Northern forests showed the only increase in sales volumes and profitability in the third quarter. Acadian Timber is based in New Brunswick, Canada, but also operates in Maine.
Acadian Timber experienced higher softwood prices and increased sales in the quarter. The company projected continued improvement: “We expect steady demand and average pricing for the remainder of the year as we continue focusing on further increasing of harvest activity.”
Biomass sales were the company’s weak point with biomass prices dropping by 25% due to “changes in product and customer mix”. However, biomass only accounts for 5.8% of total sales.