VANCOUVER, B.C., July 26, 2023 – West Fraser Timber Co. Ltd. ("West Fraser" or the "Company") (TSX and NYSE: WFG) reported today the second quarter results of 2023 ("Q2-23").
All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise.
Second Quarter Highlights
- Sales of $1.608 billion and earnings of $(131) million, or $(1.57) per diluted share
- Adjusted EBITDA1 of $80 million, representing 5% of sales
- Lumber segment Adjusted EBITDA1 of $10 million
- North America Engineered Wood Products (“NA EWP”) segment Adjusted EBITDA1 of $126 million
- Pulp & Paper segment Adjusted EBITDA1 of $(74) million, including $24 million of inventory write-downs
- Europe Engineered Wood Products (“Europe EWP”) segment Adjusted EBITDA1 of $19 million
- Released 2022 Sustainability Report
- Subsequent to quarter-end, announced an agreement to sell Hinton, Alberta pulp mill to Mondi Group plc
- Subsequent to quarter-end, extended maturities of revolving credit and term loan agreements
1. Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.
“Early in the second quarter of 2023, we continued to experience challenging demand markets, particularly in the Pulp & Paper segment where we managed through several unscheduled downtime events at our mills, including an extended maintenance shutdown at Hinton Pulp as well as curtailment of our Cariboo Pulp mill related to fibre supply constraints. Combined with declining pulp prices that led to a significant inventory write-down, the Pulp & Paper segment experienced higher losses than expected. Notwithstanding these challenges, we did see signs of demand improvement for some of our key wood building products as the quarter unfolded against a backdrop of mortgage rates well above year-ago levels. Our North America EWP segment saw particular improvement this quarter, with recovering demand in our OSB business, which has given us sufficient confidence to increase our North American OSB shipments guidance for 2023. As in the prior quarter, the product and geographic diversification of our European Engineered Wood Panels segment provided another positive EBITDA contribution that helped offset some of the weakness in our other businesses,” said Ray Ferris, West Fraser’s President & CEO.
"The West Fraser team continues to manage through the market cycle and while there have been indications that the upward trend in mortgage rates may be nearing an end and that new home construction has stabilized, we will continue to operate with financial discipline, leveraging our strong balance sheet to reinvest in our operations and return capital to shareholders. We believe our financial flexibility remains a competitive advantage that allows us to continue our core strategy of being a low-cost producer of wood building products while also preparing us to capitalize on opportunities as the demand environment becomes more favourable in the years ahead.”
Source: West Fraser
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