Deltic Timber Corp. posted a first quarter profit of $1.08 million compared to a $395,000 profit one year ago as lumber prices and volume resulted in higher sales and income growth. Net sales for the quarter ended March 30, 2017 were $53.2 million versus $50.6 million in last year’s comparable quarter.
“The improved financial results for the first quarter of 2017 were primarily due to increased operating income in the company’s manufacturing segment resulting from a higher average sales price for both lumber and medium density fiberboard (MDF), increased lumber sales volume, and improved operating performance at the company’s MDF plant,” Deltic officials said in an earnings release.
Lower interest expenses also contributed to the improved bottom line for the El Dorado-based timber and real estate concern.
“Deltic continues to benefit from its well-positioned asset base and solid team, which have allowed the company to improve financial performance over the prior year’s first quarter,” said new Deltic Timber CEO John D. Enlow. “Our average sales price for lumber sold increased 10 percent, along with slightly higher sales volumes compared to the first quarter a year ago. Stronger lumber demand and uncertainty over the Canada-U.S. trade dispute and duties favorably impacted our markets.”
Enlow said operating efficiencies at Deltic’s MDF plant also lowered per-unit costs versus a year ago.
Deltic’s real estate segment, which includes Chenal Properties, is expected to contribute to future growth in the current fiscal year, but the division posted a $700,000 loss in the current quarter. Only one residential lot was sold in the first quarter.
“Currently in our real estate segment, we are developing new residential lot offerings in our Chenal Valley and Wildwood developments to fulfill demand, and expect to have a
successful lot offering in the Wildwood development during the second quarter of 2017. We are also encouraged by the increased interest in commercial properties,” Enlow said.
The company is just projecting 5-10 residential lots to be sold in the second quarter, but anticipates 120-140 lots to be sold for the full year.
Enlow said his first quarter at the helm of Deltic Timber has been spent evaluating the company and its assets.
“Since my appointment as Deltic’s President and Chief Executive Officer, my initial focus has been to evaluate the company’s assets, competitive position and market risks and opportunities with a goal to develop a strategic vision that is laser focused on achieving strong operational performance, driving shareholder value and delivering best-in-class returns,” he said.
Shares of Deltic Timber closed trading on Wednesday at $77.57. The company’s stock has traded between $53.21 and $85.49 per share during the past year.