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BC Firms Report First-Half Losses

Fourteen publicly listed BC forest companies reported losses totalling $37 million for the first half of 1996, according to Price Waterhouse. The companies earned $490 million in the same period a year earlier. Aggregate losses would have been some $100 million higher but for an extraordinary sale of investments by MacMillan Bloedel and earnings by the company from non-BC investments.

Reported earnings of $26.8 million in the second quarter held hope for a brighter picture by year end, but were still down sharply from the $268 million in earnings during the second quarter of 1995. Cash flow from operations in the second quarter was $558.9 million, down from $638.9 million for the same period in 1995.

The companies' overall annualized return on assets was -0.8 per cent in the first half of 1996, said Price Waterhouse, compared to a 5.6 per cent return for the same period a year earlier. Annualized return on common shareholders' equity for the period was -2.1 per cent, down from 13.7% a year earlier.

MacMillan Bloedel generated the highest return on assets at 3.4 per cent (annualized) and the highest return on common shareholders' equity at 9.3 per cent (annualized) due to its sale of investments. Of the solid wood companies, Pacific Forest Products reported the highest return on assets at 3.2 per cent and the highest return on common shareholders' equity at 5.1 per cent.


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