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TWST: Please give us an overview of your coverage in the Canadian natural
resource space.
Mr. Kelertas: I cover the Canadian paper and forest products industry. I have 14
public companies under coverage at this time. TWST: How has the industry performed from a business perspective so far this
year?
Mr. Kelertas: Businesswise, they've made lots of progress in terms of cutting
costs, downsizing capacity, and actually getting commodity prices up, especially
in the pulp, paper and paperboard area. Lumber and building materials have seen
a reversal of fortunes. So, in terms of shipments, volumes, and demand, it has
been certainly better this year than last year, but in terms of stock market
performance, it has been awful. TWST: Why?
Mr. Kelertas: Largely because the better business conditions and prices haven't
turned into better margins and profits. Energy, chemical, wood fiber, and labor
costs have all been up significantly over the past 12-18 months. The biggest
culprit, however, is the currency. The Canadian dollar has appreciated something
like 22% over the past three years, and that has translated into much lower
profits every year since 2003.
Tickers included in this excerpt: ABY, AND:TSX, CFP:TSX, CFX:TSX, DTC, FPS:TSX, SFK:TSX, TBC:TSX, TRE:TSX, TWF:TSX
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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