Yahoo Finance WestRock (WRK) Signs Deal With Interfor to Divest Sawmill
WestRock Company WRK has entered into an agreement to divest its saw mill based in Summerville, SC to Interfor Corporation (“Interfor”) for cash proceeds of $59 million. The Summerville Mill produced approximately 125 million board feet of lumber as of the end of 2020. Notably, WestRock received a new permit in 2020 that will allow the mill to produce approximately 200 million board feet of lumber annually.
As part of the deal, WestRock’s Charleston, SC paper mill will also enter into an agreement with Interfor to supply chip and biomass. WestRock had previously announced that it is reconfiguring its North Charleston, SC paper mill to boost the long-term competitiveness of the mill. The move is likely to increase the company’s annual EBITDA, primarily owing to the reduction in operating costs from the shutdown of the paper machine and its associated infrastructure.
Recently, the company reported first-quarter fiscal 2020 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate. While the bottom-line figure increased year over year, revenues registered a decline.
WestRock is poised to gain from solid growth in e-commerce activities amid the coronavirus crisis. The company's consumer packaging business is benefiting from fiber-based packaging solutions, and significant demand in food, food service and beverage packaging categories. Its corrugated packaging business is poised to benefit from higher demand from distribution, industrial and agricultural customers as the economy gradually recovers from the pandemic.
Price Performance
Shares of WestRock have gained 44.1% over the past year compared with the industry’s growth of 40.1%.
Zacks Rank & Stocks to Consider
WestRock currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Fortescue Metals Group Limited FSUGY, BHP Group BHP and Impala Platinum Holdings Limited IMPUY. All of these stocks currently sport a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortescue has a projected earnings growth rate of 75.5% for the current fiscal year. The company’s shares have soared 134% in the past year.
BHP has an expected earnings growth rate of 59.5% for the current fiscal year. The company’s shares have gained around 28% over the past year.
Impala has a projected earnings growth rate of 189.4% for the current fiscal year. The stock has appreciated 51.3% in a year’s time.
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