West Fraser announces second quarter 2023 results

 Thursday, July 27, 2023

West Fraser Timber Co. Ltd. reported their second quarter results of 2023 (“Q2-23”). The financial results expresses positive business environment and highlights growth opportunities despite several challenges.

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

“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 fiber 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.

Tags: Hinton Pulp, logs, timber, West Fraser Timber, wood, wood and panel, woodworking, woodworking and manufacturing, woodworking industry, woodworking USA