Stella-Jones' sales for the 4Q 2020 amounted to $533 million, up from sales of $445 million for the same period in 2019. The improvement in sales led to an increase in gross profit, which grew 21% to $85 million, compared to the prior year period, while operating income was $50 million, or 9.4% of sales, compared with $41 million, or 9.2% of sales last year.
4Q 2020 EBITDA rose to $70 million, up 19%, compared to $59 million reported in the 4Q 2019. The increase was primarily driven by higher sales price for residential lumber, which exceeded the higher cost of lumber, and an improved sales mix for utility poles.
4Q 2020 net income totaled $34 million, or $0.52 per share, versus $28 million, or $0.41 per share last year.
Éric Vachon, President and CEO of Stella-Jones, said: “Stella-Jones’ record performance in 2020 exemplifies the resiliency of our business model, the strength of our continental network and our team’s ability to effectively adapt and deliver strong results for stakeholders, despite the challenges faced throughout the year. Sales were up for the 20th consecutive year, reaching $2.6 billion, which drove the 23% increase in EBITDA to a record $385 million. The unprecedented rise in residential lumber demand and pricing, and the continued solid sales growth in utility poles and railway ties allowed us to generate cash from operations of $178 million which we deployed to invest in our network and return capital to shareholders. In line with our capital allocation strategy, today we announced a dividend increase of 20% and an increase to the maximum number of shares to be repurchased under the Normal Course Issuer Bid, demonstrating our confidence in Stella-Jones’ strong cashflow generation.”
Sales for the year ended December 31, 2020 reached $2,551 million, up $362 million versus sales of $2,189 million in 2019.
Similarly, EBITDA increased 23% to a record high of $385 million, or a margin of 15.1%, up from $313 million, or a margin of 14.3% last year. This increase was primarily driven by sales price increases for residential lumber in the second half of the year, which exceeded the higher cost of lumber, and stronger residential lumber demand. Favourable sales mix for utility poles as well as railway ties also contributed to the improvement.
2020 net income was $210 million, or $3.12 per share, versus net income of $163 million, or $2.37 per share, last year.
Stella-Jones Inc. is a leading producer and marketer of pressure-treated wood products.
