Friday, July 26, 2024
West Fraser Timber Co. Ltd. (“West Fraser” or the “Company”) (TSX and NYSE: WFG) today reported its second quarter results for 2024 (“Q2-24”). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise.
“Once again, our North American OSB, plywood, and other engineered wood products demonstrated strong results and the value of our product diversification strategy. Q2-24 benefited from relative strength in new home construction demand that carried over from the prior quarter. Conversely, we continued to experience demand softness in our North American lumber business, particularly for SYP lumber with its greater relative exposure to repair and remodelling applications,” said Sean McLaren, West Fraser’s President and CEO.
“Despite near-term demand uncertainty across some of our end-markets, the team at West Fraser will continue to work diligently, executing on our strategy of investing capital to modernize mills and lower costs, returning excess capital to shareholders when it is prudent to do so, and maintaining financial flexibility through a strong balance sheet. While it is difficult to see catalysts for a near-term demand recovery across our industry, we remain steadfast in our approach to navigating uncertainty. We continue to realize the financial benefits from the recent closures of some of our higher-cost lumber mills and will continue to focus on optimizing our portfolio of assets to lower costs and create a more resilient organization.”
Second quarter sales were $1.705 billion, compared to $1.627 billion in the first quarter of 2024. Second quarter earnings were $105 million, or $1.20 per diluted share, compared to $35 million, or $0.42 per diluted share in the first quarter of 2024. Second quarter Adjusted EBITDA was $272 million compared to $200 million in the first quarter of 2024.
Cash and short-term investments increased to $1.004 billion as of June 28, 2024, from $900 million at December 31, 2023. Capital expenditures in the second quarter were $102 million.
West Fraser paid $24 million in dividends in the second quarter, or $0.30 per share, and announced an increase to the quarterly dividend for the third quarter, raising it to $0.32 per share.
On February 27, 2024, the Company renewed its normal course issuer bid (“2024 NCIB”), allowing the acquisition of up to 3,971,380 Common shares for cancellation from March 1, 2024, until the bid’s expiry on February 28, 2025. From January 1, 2024, to July 23, 2024, 1,379,659 total shares have been repurchased under both the prior NCIB and the 2024 NCIB.
As of July 23, 2024, West Fraser has repurchased for cancellation 42,956,254 of its shares since the acquisition of Norbord on February 1, 2021. This includes completions of substantial issuer bids (“SIB”) in 2021 and 2022 and normal course issuer bids, equalling 79% of the shares issued in respect of the Norbord Acquisition.
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Tags: dividend increase, engineered wood products, financial performance, lumber segment, Q2-24 results, west fraser, West Fraser Timber, woodworking industry, woodworking USA
