* Chinese demand up, U.S. market remains weak
VANCOUVER, Feb 17 (Reuters) - West Fraser Timber Co Ltd (WFT.TO) increased its dividend on Thursday as growing lumber sales to China helped it return to profit in the fourth quarter.
North America’s largest softwood lumber producer said it had net earnings of C$39 million ($39.6 million), or 89 Canadian cents a share, in the quarter ended in December.
That compared with a net loss of C$20 million, or 47 Canadian cents a share, a year earlier, when West Fraser took a C$49 million asset writedown.
West Fraser, which has sawmills in Western Canada and the southeastern United States, said sales in the last three months of 2010 were C$719 million, compared with C$570 million in the same quarter of 2009.
The company also said it was boosting its quarterly dividend to 14 Canadian cents a share from 6 Canadian cents.
West Fraser said that while demand from the U.S. housing market remained weak, it benefited in the quarter from production constraints in the industry and rising demand from China, which helped boost lumber prices
The company released its results after the close of markets on Thursday. Its shares finished up 4 Canadian cents at C$52.05 in Toronto.
$1=$0.98 Canadian Reporting Allan Dowd; editing by Rob Wilson