CanWel reports Q3 net earnings of C$2.2M, down from C$4.9M a year earlier; 33% revenue decline attributed to lower volume of construction materials sold and temporary closure of Alberta wood treatment facility
November 4, 2011
– CanWel Building Materials Group Ltd. on Thursday announced Q3 net earnings from continuing operations of C$2.2 million, down from $4.9 million a year earlier, on revenues 33% down to $196 million.
In a Nov. 3 press release not available for U.S. publication, CanWel attributed the decrease in revenues to "a significant reduction in volume of construction materials sold," and the temporary closure of its Alberta wood treatment facility, which suffered weather-related damage. This reduced related product sales.
A wet spring, which caused delays or cancellations of renovation projects, and CanWel's continuing focus on higher margin business leading to a decline in high volume business, were also cited as factors contributing to the reduction in volumes in the quarter.
Gross profit amounted to $22.2 million or 11.3% of revenues during Q3 versus $28.4 million or 9.7% during the same quarter in 2010, mainly as a result of the decrease in construction materials in the company’s sales mix. Construction materials accounted for 49% of CanWel’s sales in Q3 compared to 52% in the same period in 2010.
Acknowledging that the quarter had been a "continued period of challenging macroeconomic environment," Chairman and CEO Amar S. Doman said: “As a result of the integration efforts, focus on cost management and profitable growth, CanWel believes it is well positioned to benefit from a strengthening and improvement in the overall market conditions."
CanWel's Board of Directors has decided to adjust the quarterly common share dividend from $0.10 to $0.07 per share, effective for the dividend declared in the first quarter of 2012, the release stated.
Based in Vancouver, British Columbia, TSX-listed CanWel Building Materials is one of Canada’s largest national distributors in the building materials and related products sector, operating distribution centers coast to coast. CanWel distributes a wide range of building materials, lumber, hardware and renovation products.
The primary source of this article is a Nov. 3 press release issued by CanWel, Vancouver, Canada.