- Net income rose to
$79 million or$1.17 per share - EBITDA increased 38% to a new high of
$1 32 million, or a margin of 17.8% - Annual 2020 EBITDA outlook increased to reflect strong quarterly performance
- 2019 Environmental Social Governance Report published by Company
“I am extremely proud of the diligent work ethic and unwavering commitment that our employees have displayed during these rapidly changing and extremely challenging times. Supported by their contribution and the resiliency of our business, we delivered another record performance this quarter, with growth in sales, profitability and cash from operations. Benefiting from the continued strong demand across most of our product categories and the exceptional rise in market lumber prices, we realized sales growth of 18% and increased EBITDA by 38% to a quarterly best of
“Following stronger than expected results this quarter, we have increased our annual 2020 EBITDA guidance. With ample financial flexibility and sustainable profitability, we are well positioned to continue to drive growth for our shareholders,” concluded
Financial Highlights (in millions of Canadian dollars, except per share data and margin) | Q3-20 | Q3-19 | YTD Q3-20 | YTD Q3-19 | ||||
Sales(1) | 742 | 631 | 2,018 | 1,744 | ||||
Gross Profit(2) | 147 | 110 | 361 | 288 | ||||
EBITDA(2) | 132 | 96 | 315 | 254 | ||||
EBITDA margin (%)(2) | 17.8 | % | 15.2 | % | 15.6 | % | 14.6 | % |
Operating income(2) | 113 | 78 | 259 | 201 | ||||
Net income for the period | 79 | 54 | 176 | 135 | ||||
Per share – basic and diluted ($) | 1.17 | 0.78 | 2.60 | 1.96 | ||||
Weighted average shares outstanding (basic, in ‘000s) | 67,437 | 68,901 | 67,462 | 69,057 |
(1) | Prior period figures have been adjusted to conform to the current period presentation. | |
(2) | This is a non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS and may therefore not be comparable to similar measures presented by other issuers. |
THIRD QUARTER RESULTS
Sales for the third quarter of 2020 reached
Pressure-treated wood products:
- Utility poles (34% of Q3-20 sales): Utility pole sales rose to
$250 million , up 16% from sales of$216 million in the corresponding period last year. Excluding the currency conversion effect, utility pole sales increased by$32 million driven by more project-related volumes, as well as higher pricing. The pricing improvement stems from upward price adjustments in response to raw material cost increases and better product mix, including the impact of greater fire-resistant wrapped pole sales volumes. - Railway ties (25% of Q3-20 sales): Railway ties sales were
$189 million , a decrease of 2% compared to sales of$193 million in the same period last year. Excluding the currency conversion effect, railway ties sales decreased$6 million , largely due to lower volumes for Class 1 customers given the acceleration of the maintenance program for certain Class 1 customers in the second quarter. The decrease in Class 1 volumes was partially offset by continued strong non-Class 1 demand, supported by a solid level of untreated tie inventory. Overall, pricing remained relatively unchanged compared to the same period last year. - Residential lumber (30% of Q3-20 sales): Sales in the residential lumber category rose to
$220 million , up 39% from sales of$158 million in the corresponding period last year. The significant increase in sales was driven by the exceptional rise in the market price of lumber and higher volumes, which continued to be favourably impacted by strong home improvement demand during the Covid-19 pandemic. - Industrial products (5% of Q3-20 sales): Industrial product sales were
$34 million , down 6% compared to sales of$36 million in the third quarter last year, primarily due to the timing of shipments of products for rail-related bridge projects.
Logs and lumber:
- Logs and lumber (6% of Q3-20 sales): Sales in the logs and lumber product category were
$49 million , up 75% compared to$28 million in the corresponding period last year, primarily attributable to the sharp increase in the market price of lumber during the quarter.
Driven by the strong sales growth in residential lumber and utility poles, gross profit and operating income increased 34% and 45% to
Net income was
NINE-MONTH RESULTS
Sales amounted to
The improvement in sales led to an increase in gross profit, which grew 25% to
STRONG LIQUIDITY AND CAPITAL RESOURCES
The Company generated cash from operations of
NORMAL COURSE ISSUER BID (“NCIB”)
On
In the three-month period ended
QUARTERLY DIVIDEND
On
UPDATED OUTLOOK
The financial outlook provided in the Company’s Management’s Discussion and Analysis for the quarter ended
While the impact of the on-going COVID-19 pandemic on the demand for the Company’s products remains uncertain, based on the Company’s current expectations and assuming stable currencies, management is forecasting healthy sales for 2021. Utility poles sales are expected to increase in the mid to high-single digits, compared to 2020, while railway ties and industrial product sales are projected to be relatively comparable to those generated in 2020. The demand for new construction and outdoor renovation projects is expected to be strong in 2021, which should continue to benefit sales in the Company’s residential lumber product category.
PUBLICATION OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) REPORT
On
CONFERENCE CALL
Stella-Jones will hold a conference call to discuss these results on
NON-IFRS FINANCIAL MEASURES
EBITDA (operating income before depreciation of property, plant and equipment, depreciation of right-of-use assets and amortization of intangible assets), gross profit, operating income and EBITDA margin are financial measures not prescribed by IFRS and are not likely to be comparable to similar measures presented by other issuers. Management considers these non-IFRS measures to be useful information to assist knowledgeable investors understand the Company’s operating results, financial condition and cash flows as they provide an additional measure about its performance. Please refer to the non-IFRS financial measures described in the Management’s Discussion and Analysis.
ABOUT STELLA-JONES
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, general economic and business conditions (including the impact of the coronavirus pandemic), evolution in customer demand for the Company's products and services, product selling prices, availability and cost of raw materials, changes in foreign currency rates, and the ability of the Company to raise capital. As a result, readers are advised that actual results may differ from expected results. Unless required to do so under applicable securities legislation, the Company does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes after the date hereof.
Note to readers: Condensed interim unaudited consolidated financial statements for the third quarter ended September 30, 2020 as well as management’s discussion and analysis are available on Stella-Jones’ website at www.stella-jones.com.
Source: | ||
Contacts: | ||
Senior Vice-President and Chief Financial Officer | ||
Stella-Jones | MaisonBrison Communications | |
Tel.: (514) 940-8660 | Tel.: (514) 731-0000 | |
stravaglini@stella-jones.com | pierre@maisonbrison.com | |
jennifer@maisonbrison.com |
Source:
2020 GlobeNewswire, Inc., source