West Fraser Proclaims Fourth Quarter 2024 Outcomes | PR Newswire

VANCOUVER, BC, Feb. 12, 2025 /PRNewswire/ – West Fraser Timber Co. Ltd. (“West Fraser” or the “Firm”) (TSX and NYSE: WFG) reported at the moment the fourth quarter outcomes of 2024 (“This fall-24”). All greenback quantities on this information launch are expressed in U.S. {dollars} until famous in any other case. 

Fourth Quarter Highlights  

• Gross sales of $1.405 billion and lack of $62 million, or $(0.80) per diluted share
• Adjusted EBITDA¹ of $140 million, representing 10% of gross sales 
• Lumber phase Adjusted EBITDA¹ of $21 million  
• North America Engineered Wooden Merchandise (“NA EWP”) phase Adjusted EBITDA¹ of $127 million
• Pulp & Paper phase Adjusted EBITDA¹ of $(10) million 
• Europe Engineered Wooden Merchandise (“Europe EWP”) phase Adjusted EBITDA¹ of $2 million
• Repurchased 311,523 shares for combination consideration of $27 million

Annual Highlights

• Gross sales of $6.174 billion and lack of $5 million, or $(0.07) per diluted share
• Adjusted EBITDA¹ of $673 million, representing 11% of gross sales 
• Lumber phase Adjusted EBITDA¹ of $(82) million, together with $32 million of export obligation expense attributable to finalization of AR5  
• North America Engineered Wooden Merchandise (“NA EWP”) phase Adjusted EBITDA¹ of $744 million
• Pulp & Paper phase Adjusted EBITDA¹ of $4 million 
• Europe Engineered Wooden Merchandise (“Europe EWP”) phase Adjusted EBITDA¹ of $8 million
• Repurchased 1,799,217 shares for combination consideration of $144 million

“The fourth quarter of 2024 noticed continued resiliency in our NA Engineered Wooden Merchandise enterprise, the place provide and demand fundamentals remained comparatively effectively balanced on the again of strong new dwelling building demand. We additionally realized modest enchancment in our Lumber phase this quarter as we monetized a number of the advantages of our portfolio optimization technique that allowed us emigrate extra manufacturing from greater price to decrease price mills inside our platform. In Europe and the U.Ok., we continued to expertise considerably difficult markets as that area seems to be present process a protracted restoration,” mentioned Sean McLaren, West Fraser’s President and CEO.

“Comparatively excessive mortgage charges stay an affordability problem for customers and housing markets, impacting demand for our wooden constructing merchandise. Additional, potential for the U.S. administration to impose broad-based tariffs on Canadian exports provides one other aspect of demand uncertainty for the merchandise we ship to the U.S. from Canada. Nonetheless, whereas we can’t management the specter of such tariffs, we might be proactive, making a stronger group with a continued give attention to bettering the price place throughout our mill portfolio and investing capital to modernize mills the place it is sensible. You must also anticipate West Fraser to proceed to return extra capital to shareholders when prudent, and keep a powerful steadiness sheet that can present us with the monetary flexibility to reap the benefits of alternatives that match our long-term technique.”

Outcomes Abstract 

Fourth quarter gross sales had been $1.405 billion, in comparison with $1.437 billion within the third quarter of 2024. Fourth quarter loss was $62 million, or $(0.80) per diluted share, in comparison with a lack of $83 million, or $(1.03) per diluted share within the third quarter of 2024. The fourth quarter loss features a non-cash impairment lack of $70 million in relation to Europe EWP goodwill. Fourth quarter Adjusted EBITDA was $140 million in comparison with $62 million within the third quarter of 2024. 

Full yr gross sales had been $6.174 billion, in comparison with $6.454 billion in 2023. Full yr loss was $5 million, or $(0.07) per diluted share, in comparison with a lack of $167 million, or $(2.01) per diluted share in 2023. Restructuring and impairment expenses of $102 million had been recorded in 2024 as in comparison with $279 million recorded in 2023. Restructuring and impairment expenses in 2024 embrace a non-cash impairment lack of $70 million in relation to Europe EWP goodwill. Adjusted EBITDA was $673 million in 2024 in comparison with $561 million in 2023.

Liquidity and Capital Allocation 

Money and short-term investments decreased to $641 million at December 31, 2024 from $900 million at December 31, 2023, principally because of the compensation of our $300 million senior notes within the quarter. 

Capital expenditures within the fourth quarter had been $156 million. Full yr capital expenditures had been $487 million in 2024 and $477 million in 2023.

We paid $26 million of dividends within the fourth quarter, or $0.32 per share, and declared a $0.32 per share dividend payable within the first quarter of 2025. We paid $101 million of dividends in 2024.

We repaid the principal and accrued curiosity on our $300 million senior notes on maturity with money readily available within the fourth quarter.

Within the fourth quarter of 2024, we repurchased 311,523 shares below our present regular course issuer bid (“2024 NCIB”) for combination consideration of $27 million. For the complete yr, we repurchased 1,799,217 shares below the 2023 and 2024 NCIBs for combination consideration of $144 million. As of February 11, 2025, 1,989,825 shares have been repurchased below the 2024 NCIB, leaving 1,981,555 shares accessible for buy at our discretion till the expiry of the 2024 NCIB.

Outlook 

Markets 

A number of key developments which have served as constructive drivers lately are anticipated to proceed to assist medium and longer-term demand for brand new dwelling building in North America.

Essentially the most important makes use of for our North American lumber, OSB and engineered wooden panel merchandise are residential building, restore and remodelling and industrial functions. Over the medium time period, improved housing affordability from stabilization of inflation and rates of interest, a big cohort of the inhabitants getting into the standard dwelling shopping for stage, and an growing old U.S. housing inventory are anticipated to drive new dwelling building and restore and renovation spending that helps lumber, plywood and OSB demand. Over the long term, rising market penetration of mass timber in industrial and business functions can also be anticipated to turn into a extra important supply of demand progress for wooden constructing merchandise in North America.

The seasonally adjusted annualized price of U.S. housing begins was 1.50 million models in December 2024, with permits issued of 1.48 million models, in keeping with the U.S. Census Bureau. Whereas there are near-term uncertainties for brand new dwelling building, owing largely to the extent and price of change of mortgage charges and the ensuing impression on housing affordability, unemployment stays comparatively low within the U.S. Additional, the newest price mountaineering cycle is mostly believed to be over because the U.S. central financial institution just lately started to chop charges and Federal funds futures point out prospects for one further price lower by the tip of 2025, although there are evolving dangers associated to the brand new U.S. administration’s tariff and different insurance policies, which could possibly be inflationary. These developments however, demand for brand new dwelling building and our wooden constructing merchandise might decline within the close to time period ought to the broader financial system and employment sluggish or the pattern in curiosity and mortgage charges negatively impression client sentiment and housing affordability.

In Europe and the U.Ok., we anticipate a comparatively modest market restoration over the close to time period. Wanting additional out, we proceed to anticipate demand for our European merchandise will develop over the long term as use of OSB as an alternative choice to plywood grows. An growing old housing inventory can also be anticipated to assist long-term restore and renovation spending and extra demand for our wooden constructing merchandise. Within the present setting, inflation seems to have stabilized and rates of interest have begun to say no, which is directionally constructive for housing demand. That mentioned, ongoing geopolitical developments and the lagged impression of prior inflationary pressures might adversely impression near-term demand for our panel merchandise within the U.Ok. and Europe. Regardless of these threat components, we’re assured that we will navigate demand markets and capitalize on the long-term progress alternatives forward.

Operations

The Firm is offering the next operational steerage for 2025:

• Spruce-pine-fir (“SPF”) shipments are focused to be 2.7 to three.0 billion board ft
• Southern yellow pine (“SYP”) shipments are focused to be 2.5 to 2.8 billion board ft
• N.A. OSB shipments are focused to be 6.5 to six.9 billion sq. ft (3/8-inch foundation)
• European and U.Ok. OSB shipments are anticipated to be 1.0 to 1.25 billion sq. ft (3/8-inch foundation) 
• Prices for inputs, together with resins and chemical compounds, are anticipated to stay comparatively steady, whereas contract labour availability and capital tools lead instances are anticipated to proceed to enhance
• Capital expenditures are anticipated to be $400 million to $450 million¹

Because the U.S. administration’s tariff and different insurance policies evolve, we’ll consider the impression of the tariffs on our operations and take into account whether or not any revisions to our cargo estimates are warranted. Seek advice from the dialogue in our 2024 Annual MD&A below “Dangers and Uncertainties – Commerce Restrictions” for an in depth dialogue of the dangers and uncertainties related to the imposition of tariffs which can impression our operational steerage and our profitability throughout 2025.

Dividend Declared 

The Board of Administrators of the Firm has declared a dividend of $0.32 per share on the Frequent shares and the Class B Frequent shares within the capital of the Firm, payable on April 3, 2025 to shareholders of report on March 14, 2025. Dividends are designated to be eligible dividends pursuant to subsection 89(14) of the Revenue Tax Act (Canada) and any relevant provincial laws pertaining to eligible dividends. Dividends are declared and payable in U.S. {dollars}. Shareholders might elect to obtain their dividends in Canadian {dollars}. Particulars concerning the election process can be found on our web site at www.westfraser.com within the “Buyers/Inventory Info/Dividends” part.

Administration Dialogue & Evaluation (“MD&A”) 

Our 2024 Annual MD&A and audited annual consolidated monetary statements and accompanying notes can be found on our web site at www.westfraser.com and the System for Digital Doc Evaluation and Retrieval + (“SEDAR+”) at www.sedarplus.ca and the Digital Information Gathering, Evaluation and Retrieval System (“EDGAR”) web site at www.sec.gov/edgar below the Firm’s profile. 

Sustainability Report 

West Fraser’s 2023 Sustainability Report is accessible on the Firm’s web site at www.westfraser.com. This report summarizes our Environmental, Social, and Governance (“ESG”) efficiency with a give attention to our folks, communities and function of our merchandise within the carbon cycle. It’s aligned with the Sustainable Accounting Requirements Board (“SASB”), World Reporting Initiative (“GRI”), the Activity Drive on Local weather-Associated Monetary Disclosures (“TCFD”) and CDP (previously the Carbon Disclosure Venture). 

Dangers and Uncertainties 

Danger and uncertainty disclosures are included in our 2024 Annual MD&A, in addition to in our public filings with securities regulatory authorities. See additionally the dialogue of “Ahead-Wanting Statements” under.

Convention Name 

West Fraser will maintain an analyst convention name to debate the Firm’s This fall-24 monetary and working outcomes on Thursday, February 13, 2025, at 8:30 a.m. Pacific Time (11:30 a.m. Japanese Time). To take part within the name, please dial: 1-888-510-2154 (toll-free North America) or 437-900-0527 (toll) or join on the webcast. The decision and an earnings presentation can also be accessed by means of West Fraser’s web site at www.westfraser.com. Please let the operator know you want to take part within the West Fraser convention name chaired by Mr. Sean McLaren, President and Chief Government Officer. 

Following administration’s dialogue of the quarterly outcomes, traders and the analyst neighborhood might be invited to ask questions. The decision might be recorded for webcasting functions and might be accessible on the West Fraser web site at www.westfraser.com. 

About West Fraser

West Fraser is a diversified wooden merchandise firm with greater than 50 services in Canada, the USA, the United Kingdom, and Europe, which promotes sustainable forest practices in its operations. The Firm produces lumber, engineered wooden merchandise (OSB, LVL, MDF, plywood, and particleboard), pulp, newsprint, wooden chips, and different residuals. West Fraser’s merchandise are utilized in dwelling building, restore and remodelling, industrial functions, papers, tissue, and field supplies. For extra details about West Fraser, go to www.westfraser.com.

Ahead-Wanting Statements 

This information launch consists of statements and data that constitutes “forward-looking data” throughout the which means of Canadian securities legal guidelines and “forward-looking statements” throughout the which means of United States securities legal guidelines (collectively, “forward-looking statements”). Ahead-looking statements embrace statements which are forward-looking or predictive in nature and are dependent upon or confer with future occasions or situations. We use phrases comparable to “expects,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “initiatives,” “forecasts,” or detrimental variations thereof and different comparable expressions, or future or conditional verbs comparable to “might,” “will,” “ought to,” “would,” and “may,” to establish these forward-looking statements. These forward-looking statements usually embrace statements which replicate administration’s expectations concerning the operations, enterprise, monetary situation, anticipated monetary outcomes, efficiency, prospects, alternatives, priorities, targets, targets, ongoing goals, methods and outlook of West Fraser and its subsidiaries, in addition to the outlook for North American and worldwide economies for the present fiscal yr and subsequent durations.

Ahead-looking statements included on this information launch embrace references to the next and their impression on our enterprise:

• demand in North American and European markets for our merchandise, together with demand from new dwelling building, repairs and renovations and industrial and business functions;
• the impression of sustained elevated rates of interest and inflationary pressures on mortgage charges and housing affordability;
• the anticipated rising market penetration of mass timber;
• the anticipated moderation of rates of interest;
• our technique of bettering our price place throughout our portfolio of mills and investing to modernize our mills;
• the anticipated continuation of comparatively steady prices throughout our provide chain over the close to time period and continued challenges on labour availability and capital tools lead instances;
• operational steerage, together with projected shipments, projected capital expenditures and the potential impression of tariffs on our projections; and
• the continuation of investments in our property and the upkeep of our monetary flexibility and our low-cost place as aggressive benefits.

By their nature, these forward-looking statements contain quite a few assumptions, inherent dangers and uncertainties, each basic and particular, which contribute to the likelihood that the predictions, forecasts, and different forward-looking statements won’t happen. Components that would trigger precise outcomes to vary materially from these contemplated or implied by forward-looking statements embrace, however should not restricted to:

• assumptions in reference to the financial and monetary situations within the U.S., Canada, U.Ok., Europe and globally and consequential demand for our merchandise, together with the power to fulfill our cargo steerage, and variability of working schedules and the impression of the conflicts in Ukraine and the Center East;
• future will increase in rates of interest and inflation or continued sustained greater rates of interest and charges of inflation may impression housing affordability and restore and remodelling demand, which may cut back demand for our merchandise;
• close to and long-term impacts and uncertainties of U.S. administration tariff and different insurance policies on the demand and costs of our wooden merchandise within the U.S. and the consequential impression on the profitability of our Canadian enterprise, monetary situation and outcomes of operations;
• world provide chain points might end in will increase to our prices and will contribute to a discount in near-term demand for our merchandise;
• continued governmental approvals and authorizations to entry timber provide, and the impression of forest fires, infestations, environmental safety measures and actions taken by authorities respecting Indigenous rights, title and/or reconciliation efforts on these approvals and authorizations;
• dangers inherent in our product focus and cyclicality;
• results of competitors for logs, availability of fibre and fibre sources and product pricing pressures, together with continued entry to log provide and fibre sources at aggressive costs and the impression of third-party certification requirements; together with reliance on fibre off-take agreements and third get together customers of wooden chips;
• results of variations within the value and availability of producing inputs, together with vitality, worker wages, resin and different enter prices, and the impression of inflationary pressures on the prices of those manufacturing prices, together with will increase in stumpage charges and log prices;
• availability and prices of transportation companies, together with truck and rail companies, and port services, and impacts on transportation companies of wildfires and extreme climate occasions, and the impression of elevated vitality costs on the prices of transportation companies;
• the recoverability of property, plant and tools ($3,842 million), goodwill and intangibles ($2,180 million), each as at December 31, 2024, relies on quite a few key assumptions that are inherently unsure, together with manufacturing quantity, product pricing, working prices, terminal a number of, and low cost price. Adversarial adjustments in these assumptions may result in a change in monetary outlook which can end in carrying quantities exceeding their recoverable quantities and as a consequence an impairment, which may have a fabric non-cash opposed impact on our outcomes of operations;
• transportation constraints, together with the impression of labour disruptions, might negatively impression our capability to fulfill projected cargo volumes;
• the timing of our deliberate capital investments could also be delayed, the last word prices of those investments could also be elevated because of inflation, and the projected charges of return is probably not achieved;
• varied occasions that would disrupt operations, together with pure, man-made or catastrophic occasions together with drought, wildfires, cyber safety incidents, any state of emergency and/or evacuation orders issued by governments, and ongoing relations with staff;
• dangers inherent to buyer dependence;
• dangers related to worldwide commerce, together with impression of future cross border commerce rulings, agreements and obligation charges;
• implementation of essential strategic initiatives and identification, completion and integration of acquisitions;
• impression of adjustments to, or non-compliance with, environmental or different rules;
• authorities restrictions, requirements or rules supposed to scale back greenhouse gasoline emissions and our incapability to realize our SBTi dedication for the discount of greenhouse gases as deliberate;
• the prices and timeline to realize our greenhouse gasoline emissions goals could also be better and take longer than anticipated;
• adjustments in authorities coverage and regulation, together with actions taken by the Authorities of British Columbia pursuant to latest amendments to forestry laws and initiatives to defer logging of forests deemed “previous progress” and the impression of those actions on our timber provide;
• impression of climate and local weather change on our operations or the operations or demand of our suppliers and prospects;
• capability to implement new or upgraded data expertise infrastructure;
• impression of data expertise service disruptions or failures;
• impression of any product legal responsibility claims in extra of insurance coverage protection;
• dangers inherent to a capital intensive trade;
• impression of future outcomes of tax exposures;
• potential future adjustments in tax legal guidelines, together with tax charges;
• dangers related to investigations, claims and authorized, regulatory and tax proceedings protecting issues which if resolved unfavourably might end in a loss to the Firm;
• results of foreign money exposures and trade price fluctuations;
• truthful values of our electrical energy swaps could also be risky and delicate to fluctuations in ahead electrical energy costs and adjustments in authorities coverage and regulation;
• future working prices;
• availability of financing, financial institution strains, securitization applications and/or different technique of liquidity;
• continued entry to timber provide within the conventional territories of Indigenous Nations and our capability to work with Indigenous Nations in B.C. to safe continued fibre provide for our lumber mills by means of varied business agreements and joint ventures;
• our capability to proceed to take care of efficient inner management over monetary reporting;
• the dangers and uncertainties described on this doc; and
• different dangers detailed every so often in our annual data varieties, annual studies, MD&A, quarterly studies and materials change studies filed with and furnished to securities regulators.

As well as, precise outcomes and outcomes of those statements will rely upon plenty of components together with these issues described below “Dangers and Uncertainties” in our 2024 Annual MD&A and will differ materially from these anticipated or projected. This checklist of essential components affecting ahead–wanting statements isn’t exhaustive and reference must be made to the opposite components mentioned in public filings with securities regulatory authorities.  Accordingly, readers ought to train warning in relying upon ahead–wanting statements and we undertake no obligation to publicly replace or revise any ahead–wanting statements, whether or not written or oral, to replicate subsequent occasions or circumstances besides as required by relevant securities legal guidelines.

Non-GAAP and Different Specified Monetary Measures

All through this information launch, we make reference to (i) sure non-GAAP monetary measures, together with Adjusted EBITDA and Adjusted EBITDA by phase (our “Non-GAAP Monetary Measures”), and (ii) sure supplementary monetary measures, together with our anticipated capital expenditures (our “Supplementary Monetary Measures”). We imagine that these Non-GAAP Monetary Measures and Supplementary Monetary Measures (collectively, our “Non-GAAP and different specified monetary measures”) are helpful efficiency indicators for traders with regard to working and monetary efficiency and our monetary situation. These Non-GAAP and different specified monetary measures should not usually accepted monetary measures below IFRS Accounting Requirements and shouldn’t have standardized meanings prescribed by IFRS Accounting Requirements. Buyers are cautioned that none of our Non-GAAP Monetary Measures must be thought-about as an alternative choice to earnings or money stream, as decided in accordance with IFRS Accounting Requirements. As there isn’t a standardized methodology of calculating any of those Non-GAAP and different specified monetary measures, our methodology of calculating every of them might differ from the strategies utilized by different entities and, accordingly, our use of any of those Non-GAAP and different specified monetary measures is probably not straight similar to equally titled measures utilized by different entities. Accordingly, these Non-GAAP and different specified monetary measures are supposed to supply further data and shouldn’t be thought-about in isolation or as an alternative choice to measures of efficiency ready in accordance with IFRS Accounting Requirements. The reconciliation of the Non-GAAP measures used and introduced by the Firm to essentially the most straight comparable measures below IFRS Accounting Requirements is offered within the tables set forth under. Figures have been rounded to thousands and thousands of {dollars} to replicate the accuracy of the underlying balances and because of this sure tables might not add resulting from rounding impacts.

Adjusted EBITDA and Adjusted EBITDA by phase

Adjusted EBITDA is outlined as earnings decided in accordance with IFRS Accounting Requirements including again the next line objects from the consolidated statements of earnings and complete earnings: finance earnings or expense, tax provision or restoration, amortization, equity-based compensation, restructuring and impairment expenses, and different earnings or expense.

Adjusted EBITDA by phase is outlined as working earnings decided for every reportable phase in accordance with IFRS including again the next line objects from the consolidated statements of earnings and complete earnings for that reportable phase: amortization, equity-based compensation, and restructuring and impairment expenses.

EBITDA is usually reported and extensively utilized by traders and lending establishments as an indicator of an organization’s working efficiency, capability to incur and repair debt, and as a valuation metric. We calculate Adjusted EBITDA and Adjusted EBITDA by phase to exclude objects that don’t replicate our ongoing operations and that ought to not, in our opinion, be thought-about in a long-term valuation metric or included in an evaluation of our capability to service or incur debt.

We imagine that disclosing these measures assists readers in measuring efficiency relative to different entities that function in comparable industries and understanding the continued money producing potential of our enterprise to supply liquidity to fund working capital wants, service excellent debt, fund future capital expenditures and funding alternatives, and pay dividends. Adjusted EBITDA is used as a further measure to guage the working and monetary efficiency of our reportable segments.

The next tables reconcile Adjusted EBITDA to essentially the most straight comparable IFRS measure, earnings.

Annual Adjusted EBITDA

($ thousands and thousands) 

Quarterly Adjusted EBITDA

($ thousands and thousands) 

The next tables reconcile Adjusted EBITDA by phase to essentially the most straight comparable IFRS measures for every of our reportable segments. We take into account working earnings to be essentially the most straight comparable IFRS measure for Adjusted EBITDA by phase as working earnings is the IFRS measure most utilized by the chief working choice maker when evaluating phase working efficiency.

Annual Adjusted EBITDA by phase

($ thousands and thousands) 

 

Quarterly Adjusted EBITDA by phase

($ thousands and thousands) 

 

Anticipated capital expenditures

This measure represents our greatest estimate of the amount of money outflows regarding additions to capital property for the present yr primarily based on our present outlook. This quantity is comprised primarily of varied enchancment initiatives and maintenance-of-business expenditures, initiatives targeted on optimization and automation of the manufacturing course of, and initiatives focused to scale back greenhouse gasoline emissions. This measure assumes no deterioration in market situations through the yr and that we’re in a position to proceed with our plans on time and on finances. This estimate is topic to the dangers and uncertainties recognized within the Firm’s 2024 Annual MD&A.

For Extra Info

Investor Contact

Robert B. Winslow, CFA

Director, Investor Relations & Company Improvement

Tel. (416) 777-4426

shareholder@westfraser.com

Media Contact

Joyce Wagenaar

Director, Communications

Tel. (604) 817-5539

media@westfraser.com

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SOURCE West Fraser Timber Co. Ltd.