TORONTO, ON, May 11, 2022 – GreenFirst Forest Products Inc. (TSX: GFP) (“GreenFirst” or the “Company”) today announced results for the first quarter of 2022.
The Company’s condensed consolidated interim financial statements and related Management Discussion and Analysis (“MD&A”) are available on GreenFirst’s website at www.greenfirst.ca and on SEDAR at www.sedar.com. All amounts are in thousands of Canadian dollars unless indicated otherwise.
First Quarter of 2022 Highlights
- First quarter 2022 (“Q1 2022”) net earnings were $34.0 million, or $0.18 per share (diluted), compared to $8.0 million, or $ 0.04 per share, in the fourth quarter of 2021 (“Q4 2021”), which was the Company’s first full quarter operating its acquired forest-products assets
- Q1 2022 Adjusted EBITDA was $44.9 million (see, Reconciliation of Adjusted EBITDA), an improvement of 144% compared to the Adjusted EBITDA in Q4 2021
- Lumber pricing improved significantly in Q1 2022 and outlook continues to be strong for the remainder of the second quarter of 2022 and beyond, with continued volatility but above-historical levels expected
- Asset-backed revolving loan facility of $65.0 million was undrawn at quarter end and has remained undrawn at May 11, 2022. Seasonal log inventory build up continued to be funded from strong operating cash flow
- The Company plans to conclude its Transition Services Agreement with Rayonier Advanced Materials by end of May 2022
- The Government of Ontario has offered support to relocate the Kenora sawmill, an opportunity we continue to work on. The Company is also moving some equipment to our other Ontario sawmills to improve production and recovery
- Subsequent to Q1 2022, the Company made a voluntary repayment of US$8.9 million on its outstanding term debt
“We are pleased to see the lumber markets showing strength in 2022, which helped us achieve strong results for our first quarter,” said Rick Doman, CEO of GreenFirst. “Our earnings reflect the favourable pricing in lumber, however transportation remains a challenge, which led to lower sales volume and higher inventory levels. We continue to focus on investing in our operations to improve productivity and recovery.”
Acquisition of Sawmills and Paper Mill
On August 28, 2021, the Company acquired six sawmills and one paper mill from Rayonier Advanced Materials (the “Rayonier Asset Acquisition”) for aggregate consideration of $293.7 million. The Company has measured and recorded the identifiable assets acquired and the liabilities assumed at management’s estimates of their acquisition-date fair values. As the acquisition is within the measurement period, the Company and its external valuation experts are still assessing acquisition date fair value adjustments, including fair values of property, plant and equipment and related depreciation charges, leases and estimated final purchase price adjustments related to inventory and other items. For further information on the purchase price accounting, please refer to the Company’s first quarter interim financial statements.
Source: GreenFirst Forest Products
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