November 2, 2009 / 10:28 PM / 9 years ago

UPDATE 1-West Fraser Timber loss grows with charges

* Takes impairment charge on paper mill closure

* Has “modest optimism” about housing market (Adds details)

VANCOUVER, British Columbia, Nov 2 (Reuters) - Charges related to a paper mill closure increased West Fraser Timber Co Ltd’s (WFT.TO) quarterly loss, but the Canadian forestry company said on Monday there were signs demand for construction lumber would improve.

West Fraser, North America’s largest softwood lumber producer, said it lost C$198 million ($183.3 million), or C$4.64 per share, in the third quarter. That compared with a loss of C$2 million, or 5 Canadian cents a share, in the same quarter a year earlier.

This quarter’s results included C$138 million in impairment charges related to previously announced decision to close its linerboard facility in Kitimat, British Columbia. The mill will end operations at the end of January.

Sales in the quarter were C$679 million, down from C$848 million in the same quarter of 2008.

The company said there were some signs of improvement in housing starts that were a source of modest optimism, but cautioned that there economic factors including increasing U.S. unemployment that could derail any building recovery.

West Fraser expects to record additional charges related to the mill closure in the fourth quarter, but said the overall performance of its pulp and paper unit should improve with stronger pulp pricing and demand.

$1=$1.08 Canadian Reporting by Allan Dowd, editing by Peter Galloway

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