Western Forest Products Inc. reported a challenging fourth quarter and full-year 2025, reflecting continued pressure in global lumber markets, lower shipment volumes, and ongoing operational constraints in British Columbia.
Despite the difficult operating environment, the company ended the year with a materially strengthened balance sheet and advanced its strategic shift toward higher-value products.
Financial performance
For the fourth quarter of 2025, Western posted adjusted EBITDA of negative $6.2 million, compared with $14.4 million in Q4 2024. Revenue declined to $201.9 million, down from $273.2 million a year earlier, reflecting reduced lumber shipments and weaker demand in key export markets. The quarterly net loss reached $17.5 million, versus a net loss of $1.2 million in the prior-year period.
On a full-year basis, adjusted EBITDA was negative $68.2 million, compared with $8.9 million in 2024, while revenue totaled $986.5 million, down from $1.06 billion the previous year. Management highlighted that results were influenced by persistently weak lumber markets, higher duties and tariffs, and lower production levels.
Operational trends
Lumber production in Q4 2025 fell to 94 million board feet, from 135 million board feet in Q4 2024, while shipments declined 26% year over year. U.S. shipments dropped sharply, down 64%, while non-U.S. shipments decreased 8%. For the full year, total shipments were 522 million board feet, an 11% decline from 2024.
Average lumber selling prices were relatively stable, while log costs increased. The average BC log sales price rose to $144 per cubic metre in Q4 2025, compared with $121 per cubic metre a year earlier, adding further margin pressure.
Balance sheet and capital spending
Western ended 2025 with liquidity of $212.2 million, up from $144.6 million at the end of 2024, and reduced its net debt-to-capitalization ratio to 7%, from 12% the prior year. Capital expenditures in 2026 are expected to range between $45 million and $50 million, including investments in new continuous and thermal dry kilns to support value-added production.
Strategic priorities and outlook
The company continues to invest in higher-value lumber products, with construction progressing on two continuous dry kilns and a new thermal kiln at its Value-Added Division. Western also confirmed it will not rebuild the Columbia Vista Division sawmill and has begun a process to sell the site and associated assets.
Looking ahead, management expects lumber markets to remain challenging in early 2026, citing economic uncertainty, a slower U.S. housing market, and weak demand in key export regions, including Japan and China. Planned curtailments at several coastal sawmills are intended to align production with market conditions and log availability.
“Despite more challenging markets and higher softwood lumber duties and tariffs in 2025, we enter 2026 with a significantly improved balance sheet to navigate near-term uncertainty,” said President and CEO Steven Hofer, adding that the company remains focused on advancing its transition toward higher-margin, value-added products.
Western Forest Products is an integrated forest products company supplying high-value and specialty softwood products to global markets. Its operations are primarily located on the coast of British Columbia and in Washington State.
Source: Western Forest Products
