West Fraser returned to positive adjusted EBITDA in the second quarter of 2026 as higher sales, stronger lumber pricing and operational gains lifted performance. The company nevertheless remained in a net loss position, while revenue was lower than a year earlier.
All financial figures are reported in U.S. dollars.
Sales reached $1.434 billion, up 7.5% from $1.334 billion in the first quarter but down 6% from $1.532 billion a year earlier. West Fraser reported a net loss of $61 million, or $0.78 per diluted share, compared with a loss of $188 million, or $2.40 per share, in the previous quarter. The company had recorded a $24 million loss in the second quarter of 2025.
Adjusted EBITDA improved to $59 million, representing 4% of sales, after a negative $66 million in the first quarter.
All core segments report positive adjusted EBITDA
The lumber segment generated adjusted EBITDA of $41 million, including a favourable $13 million adjustment related to duties. North American engineered wood products and European engineered wood products each contributed $13 million.
Other operating segments recorded negative adjusted EBITDA of $8 million, largely because of maintenance work at the Cariboo pulp facility.
President and CEO Sean McLaren said the quarter reflected “continued progress against our business priorities,” supported by improved conditions across most of the company’s markets. West Fraser’s three core segments — lumber, North American engineered wood products and European engineered wood products — all reported positive adjusted EBITDA.
Production at the company’s Henderson, Texas, sawmill more than doubled from the first quarter and reached levels comparable to those of the mill it replaced. Canadian lumber production increased 13% as the Blue Ridge facility returned to normal operating rates.
West Fraser also completed the wind-down of its High Level, Alberta, oriented strand board mill. In the U.S. South, year-to-date southern yellow pine lumber production remained similar to 2025 despite the closure of the Augusta sawmill in the fourth quarter of last year.
Operating cash flow turns positive as cash balance declines
West Fraser generated $192 million in cash from operations, reversing a $170 million outflow in the first quarter. It also repaid $148 million in operating loans during the quarter.
Cash and short-term investments stood at $74 million on July 3, compared with $81 million at the end of the first quarter and $202 million at the end of 2025. The company had drawn $55 million from its $1 billion credit facility, down from $203 million at the end of the first quarter.
Capital expenditures totalled $159 million during the first half. West Fraser maintained its full-year capital spending forecast of $300 million to $350 million, assuming stable demand and no further delays to planned projects. The company also declared a quarterly dividend of $0.32 per share, payable in the third quarter.
Trade measures remain a source of uncertainty
West Fraser continues to face a 10% U.S. Section 232 tariff on imported softwood timber and lumber, in addition to existing duties on Canadian softwood lumber.
The U.S. administration has also announced 50% tariffs under Section 338 on certain Canadian products, scheduled to take effect on August 19, 2026. West Fraser said its U.S.-bound shipments of softwood lumber, OSB and MDF — the latter representing approximately half of its total MDF shipments — were not covered by the new measures.
Had the Section 338 tariffs applied during the first half, the company estimated they would have affected approximately 3% of its plywood shipments and 20% of its laminated veneer lumber shipments to U.S. customers. The potential indirect effects on its MDF business and downstream supply chains remained uncertain.
Housing conditions temper the outlook
West Fraser maintained its 2026 shipment targets of 2.4 billion to 2.7 billion board feet for spruce-pine-fir and southern yellow pine lumber. It also reiterated its North American OSB target of 5.9 billion to 6.3 billion square feet and its European OSB target of 1.0 billion to 1.25 billion square feet, both measured on a 3/8-inch basis.
The company expects lumber demand to remain stable during 2026, while North American OSB demand could be somewhat softer. European demand for engineered wood products is expected to remain stable or improve modestly. In the near term, housing affordability, mortgage rates, input costs and tariff uncertainty are expected to continue weighing on market conditions.
Complete figures are available in West Fraser’s second-quarter 2026 results.
West Fraser is a diversified wood products company with more than 50 facilities in Canada, the United States, the United Kingdom and Europe. Its products include lumber, oriented strand board, laminated veneer lumber, medium-density fibreboard, plywood, particleboard, northern bleached softwood kraft pulp, paper, wood chips and other residual products. West Fraser is listed on the Toronto and New York stock exchanges under the symbol WFG.
