The largest board room in West Fraser’s Quesnel head office was standing-room-only on Tuesday morning (April 23) as shareholders, the board of directors and company employees gathered to hear about the forestry firm’s recent progress and its projections for the coming months.
Outgoing CEO Ted Seraphim gave a brief introduction with some comments on the company, but he deferred to his soon-to-be replacement, Ray Ferris, for the bulk of the presentation.
Seraphim drew attention to big results for the company in the last fiscal year.
“When you look at our net earnings of over $800 million, that’s a record for the company. And we had sales of over $6 billion.”
He made sure to address the giant sequoia in the room, however.
“But when you look at that fourth quarter, it’s quite a stark contrast.”
Net earnings in the last quarter of the year were a very small percentage of the year as a whole, down to $29 million altogether.
“It just goes to show you how quickly things have changed,” he pointed out. “In any event, despite these challenges, the company continues to out perform our key competitors.”
The CEO pointed to a few graphs that show favourably comparing to three largest public lumber producers in North America (listed as Comp A, B and C)in last year’s shareholder returns, 2017 returns, total returns since the 2006 housing recession and the returns over the last 30 years.
“Despite the cyclical nature of the industry, and I think we just showed that even with our fourth quarter results, we continue to achieve strong financial results,” he said.
“Why is that?” he asked of the audience. “It’s due to following a consistent and straightforward business strategy, maintaining a conservative balance sheet, reinvesting in our business and striving to be the high-margin and low-cost producer in each of our business segments.
“It’s also due to the values that have driven and inspired each generation of employees. We face different challenges and opportunities than we did in 1955 [when the company was first started], but we succeed when we approach them with the values our founders instilled. Those values are humility, competitiveness and teamwork and should be no different today than they were 64 years ago.”