West Fraser Announces First Quarter 2025 Results

VANCOUVER, BC
, April 22, 2025 /PRNewswire/ – West Fraser Timber Co. Ltd. (“West Fraser” or the “Company”) (TSX and NYSE: WFG) reported today the first quarter results of 2025 (“Q1-25”). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise. 

First Quarter Highlights  

• Sales of $1.459 billion and earnings of $42 million, or $0.46 per diluted share
• Adjusted EBITDA¹ of $195 million, representing 13% of sales
• Lumber segment Adjusted EBITDA¹ of $66 million
• North America Engineered Wood Products (“NA EWP”) segment Adjusted EBITDA¹ of $125 million
• Pulp & Paper segment Adjusted EBITDA¹ of $7 million
• Europe Engineered Wood Products (“Europe EWP”) segment Adjusted EBITDA¹ of $(2) million
• Repurchased 529,660 shares for aggregate consideration of $44 million

“In many respects, the first quarter of 2025 was a continuation of the more balanced supply and demand fundamentals we have experienced in recent quarters. While still operating well below mid-cycle economics, our Lumber segment posted its best quarter in more than two years, supported in part by the impact of our mill curtailments and closures as well as the benefits we have realized with our portfolio optimization strategy that shifts a greater proportion of production to our lower cost mills,” said Sean McLaren, West Fraser’s President and CEO.

“Demand uncertainty for wood building products persists more broadly given ongoing housing affordability challenges, and this has only been magnified recently by a U.S. administration that has both threatened and imposed higher lumber duties and punitive tariffs on many of the products we export from Canada to the U.S. These challenges aside, we continue to focus on the controllables so that we may be better prepared for an eventual market recovery. We are removing costs and investing capital to modernize mills where practical, maintaining a defensive balance sheet and strong liquidity, and executing on a balanced capital allocation strategy so we may be opportunistic in pursuit of our long-term growth strategy.”

Results Summary

First quarter sales were $1.459 billion, compared to $1.405 billion in the fourth quarter of 2024. First quarter earnings were $42 million, or $0.46 per diluted share, compared to a loss of $62 million, or $(0.80) per diluted share in the fourth quarter of 2024. The fourth quarter included a non-cash impairment loss of $70 million in relation to Europe EWP goodwill. First quarter Adjusted EBITDA was $195 million compared to $140 million in the fourth quarter of 2024.

Tariffs

On March 1, 2025, the U.S. administration issued an executive order directing the Secretary of Commerce to initiate a Section 232 investigation to determine the effects on national security of imports of timber, lumber and their derivative products. The executive order requires the Secretary of Commerce to submit a report to the U.S. president within 270 days with findings and recommendations on actions to mitigate any such threats, such as potential tariffs, export controls, including quotas, or incentives to increase domestic production.

Between March 4, 2025 and March 6, 2025, 25% tariffs were imposed on our wood products shipped from Canada to the U.S., including lumber, OSB, plywood, MDF, and pulp. On March 6, 2025, the U.S. administration signed an executive order temporarily pausing tariffs on Canadian goods compliant with the United States-Mexico-Canada Agreement (“USMCA”) until April 2, 2025. Included in the USMCA are products such as lumber, OSB, plywood, MDF, and pulp.

On April 2, 2025, the U.S. administration issued an executive order imposing tariffs beginning at 10% on all imports into the U.S. from all countries, but with much higher rates for many. While Canada was not exempt, goods compliant with the USMCA are not subject to these additional tariffs.

Refer to the discussion in our 2024 Annual MD&A under “Risks and Uncertainties – Trade Restrictions” as supplemented by the discussion in our Q1-25 MD&A under “Risks and Uncertainties” for discussion of risks associated with the aforementioned tariffs and possible actions resulting from the Section 232 investigation.

Liquidity and Capital Allocation 

Cash and short-term investments decreased to $390 million at March 28, 2025 from $641 million at December 31, 2024, primarily due to the expected seasonal log inventory build. 

Capital expenditures in the first quarter were $104 million.

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

On February 27, 2025, we renewed our normal course issuer bid (“2025 NCIB”) allowing us to acquire up to 3,868,177 Common shares for cancellation from March 3, 2025 until the expiry of the bid on March 2, 2026. From January 1, 2025 to April 21, 2025, 637,258 shares have been repurchased under both the prior NCIB and the 2025 NCIB.

Outlook 

Markets 

Several key trends that have served as positive drivers in recent years are expected to continue to support medium and longer-term demand for new home construction in North America.

The most significant uses for our North American lumber, OSB and engineered wood panel products are residential construction, repair and remodelling and industrial applications. Over the medium term, improved housing affordability from stabilization of inflation and interest rates, a large cohort of the population entering the typical home buying stage, and an aging U.S. housing stock are expected to drive new home construction and repair and renovation spending that supports lumber, plywood and OSB demand. Over the longer term, growing market penetration of mass timber in industrial and commercial applications is also expected to become a more significant source of demand growth for wood building products in North America.

The seasonally adjusted annualized rate of U.S. housing starts was 1.32 million units in March 2025, with permits issued of 1.48 million units, according to the U.S. Census Bureau. While there are near-term uncertainties for new home construction, owing in large part to the level and rate of change of mortgage rates and the resulting impact on housing affordability, unemployment remains relatively low in the U.S. Further, the U.S. central bank has cut its key lending rate a total of 100 bps since September 2024 and Federal funds futures indicate prospects for additional rate cuts in mid-2025, though there are evolving risks related to the U.S. administration’s tariff and other policies, which could be inflationary and could impact this trend in rates. These developments notwithstanding, demand for new home construction and our wood building products may decline in the near term should the broader economy and employment slow or the trend in interest and mortgage rates negatively impact consumer sentiment and housing affordability.

In Europe and the U.K., we expect challenging markets to persist over the near term. Looking further out, we continue to expect demand for our European products will grow over the longer term as use of OSB as an alternative to plywood grows. An aging housing stock is also expected to support long-term repair and renovation spending and additional demand for our wood building products. In the current environment, inflation appears to have stabilized and interest rates have begun to decline, which is directionally positive for housing demand. That said, ongoing geopolitical developments, including the potential price inflation of U.S. tariffs on the U.K. and Europe, may adversely impact near-term demand for our panel products in the region. Despite these risk factors, we are confident that we will be able to navigate demand markets and capitalize on the long-term growth opportunities ahead.

Operations

The Lumber segment has experienced a slower than expected start to the year, owing to transportation and weather challenges that have influenced shipments as well as uncertainty related to demand impacts from the U.S. administration’s shifting tariff policies. As such, and based on what we can see today, including the mill closures and indefinite curtailments we announced last year and the uncertainties around the impact of tariffs, offset in part by the ongoing reliability and capital improvement gains across our lumber mill portfolio, we are reducing the top-end of the ranges of our 2025 lumber shipments targets. For SPF shipments, we are now targeting 2.7 to 2.9 billion board feet (previously 2.7 to 3.0 billion board feet) and for SYP shipments, we are now targeting 2.5 to 2.7 billion board feet (previously 2.5 to 2.8 billion board feet).

Our NA EWP segment, much like the Lumber segment, has experienced transportation challenges early in 2025, which have in some instances limited our ability to ship OSB to meet customer demand. Given these constraints and the ongoing risks to our demand forecasts because of trade tariffs and policy uncertainty, we are reducing the top-end of the range of our 2025 North American OSB target shipments. We are now targeting shipments of 6.5 to 6.8 billion square feet (3/8-inch basis) versus our previous target of 6.5 to 6.9 billion square feet (3/8-inch basis).

In our Europe EWP segment, we continue to expect demand to improve for our MDF, particleboard and OSB panel products in 2025, recognizing there are ongoing macroeconomic uncertainties surrounding interest rates and economic growth in the region. As such, we reiterate guidance for 2025 OSB shipments in the range of 1.0 to 1.25 billion square feet (3/8-inch basis).

The global pulp market has begun to experience disruption with the economic impact of U.S. tariffs creating considerable demand uncertainty in Chinese markets. As such, we anticipate NBSK pricing weakness over the near- to medium-term and a potentially significant adverse financial impact on our Pulp & Paper segment.

On balance, we continued to experience relatively stable costs for inputs across our supply chain in Q1-25, including resins and chemicals, and contract labour availability and capital equipment lead times continued to show improvement. We expect these trends to largely continue in 2025.

Based on our current outlook, assuming no deterioration from current market demand conditions during the year and no additional lengthening of lead times for projects underway or planned, we continue to anticipate capital expenditures in the range of $400 million to $450 million in 2025¹.

As the U.S. administration’s tariff and other policies evolve, we will evaluate the impact of the tariffs on our operations and consider whether any revisions to our shipment estimates are warranted. Refer to the discussion in our 2024 Annual MD&A under “Risks and Uncertainties – Trade Restrictions” and in our Q1-25 MD&A under “Risks and Uncertainties” for a detailed discussion of the risks and uncertainties associated with the imposition of tariffs, which may impact our operational guidance and our profitability during 2025.

Management Discussion & Analysis (“MD&A”) 

Our Q1-25 MD&A and interim consolidated financial statements and accompanying notes are available on our website at www.westfraser.com and the System for Electronic Document Analysis and Retrieval + (“SEDAR+”) at www.sedarplus.ca and the Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) website at www.sec.gov/edgar under the Company’s profile. 

Risks and Uncertainties 

Risk and uncertainty disclosures are included in our 2024 Annual MD&A, as updated in the disclosures in our Q1-25 MD&A, as well as in our public filings with securities regulatory authorities. See also the discussion of “Forward-Looking Statements” below.

Conference Call 

West Fraser will hold an analyst conference call to discuss the Company’s Q1-25 financial and operating results on Wednesday, April 23, 2025, at 7:00 a.m. Pacific Time (10:00 a.m. Eastern Time). To participate in the call, please dial: 1-888-510-2154 (toll-free North America) or 437-900-0527 (toll) or connect on the webcast. The call and an earnings presentation may also be accessed through West Fraser’s website at www.westfraser.com. Please let the operator know you wish to participate in the West Fraser conference call chaired by Mr. Sean McLaren, President and Chief Executive Officer. 

Following management’s discussion of the quarterly results, investors and the analyst community will be invited to ask questions. The call will be recorded for webcasting purposes and will be available on the West Fraser website at www.westfraser.com.

About West Fraser

West Fraser is a diversified wood products company with more than 50 facilities in Canada, the United States, the United Kingdom, and Europe, which promotes sustainable forest practices in its operations. The Company produces lumber, engineered wood products (OSB, LVL, MDF, plywood, and particleboard), pulp, newsprint, wood chips, and other residuals. West Fraser’s products are used in home construction, repair and remodelling, industrial applications, papers and tissue. For more information about West Fraser, visit www.westfraser.com.

Forward-Looking Statements 

This news release includes statements and information that constitutes “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Forward-looking statements include statements that are forward-looking or predictive in nature and are dependent upon or refer to future events or conditions. We use words such as “expects,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “projects,” “forecasts,” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could,” to identify these forward-looking statements. These forward-looking statements generally include statements which reflect management’s expectations regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of West Fraser and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods.

Forward-looking statements included in this news release include references to the following and their impact on our business:

• demand in North American and European markets for our products, including demand from new home construction, repairs and renovations and industrial and commercial applications;
• the impact on demand for our products resulting from the U.S. administration’s tariff and other policies;
• the impact of sustained elevated interest rates and inflationary pressures on mortgage rates and housing affordability;
• the anticipated growing market penetration of mass timber;
• the anticipated moderation of interest rates and the potential impact of the U.S. administration’s tariff and other policies on this trend;
• our strategy of improving our cost position across our portfolio of mills and investing to modernize our mills;
• the anticipated continuation of relatively stable costs across our supply chain over the near term and continued challenges on labour availability and capital equipment lead times;
• operational guidance, including projected shipments, projected capital expenditures and the potential impact of tariffs on our projections; and
• the continuation of investments in our assets and the maintenance of our financial flexibility and our low-cost position as competitive advantages.

By their nature, these forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predictions, forecasts, and other forward-looking statements will not occur. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to:

• assumptions in connection with the economic and financial conditions in the U.S., Canada, U.K., Europe and globally and consequential demand for our products, including the ability to meet our shipment guidance, and variability of operating schedules and the impact of the conflicts in Ukraine and the Middle East;
• future increases in interest rates and inflation or continued sustained higher interest rates and rates of inflation could impact housing affordability and repair and remodelling demand, which could reduce demand for our products;
• near and long-term impacts and uncertainties of U.S. administration tariff and other policies on the demand and prices of our wood products in the U.S. and the consequential impact on the profitability of our Canadian business, financial condition and results of operations;
• risks associated with international trade and trade restrictions, including impact of tariff actions and possible actions from the Section 232 investigation such as potential tariffs, export controls, including quotas, or incentives to increase domestic production, future cross border trade rulings, agreements and duty rates;
• global supply chain issues may result in increases to our costs and may contribute to a reduction in near-term demand for our products;
• continued governmental approvals and authorizations to access timber supply, and the impact of forest fires, infestations, environmental protection measures and actions taken by government respecting Indigenous rights, title and/or reconciliation efforts on these approvals and authorizations;
• risks inherent in our product concentration and cyclicality;
• effects of competition for logs, availability of fibre and fibre resources and product pricing pressures, including continued access to log supply and fibre resources at competitive prices and the impact of third-party certification standards; including reliance on fibre off-take agreements and third party consumers of wood chips;
• effects of variations in the price and availability of manufacturing inputs, including energy, employee wages, resin and other input costs, and the impact of inflationary pressures on the costs of these manufacturing costs, including increases in stumpage fees and log costs;
• availability and costs of transportation services, including truck and rail services, and port facilities, and impacts on transportation services of wildfires and severe weather events, and the impact of increased energy prices on the costs of transportation services;
• the recoverability of property, plant and equipment ($3,823 million), goodwill and intangibles ($2,168 million), both as at March 28, 2025, is based on numerous key assumptions which are inherently uncertain, including production volume, product pricing, operating costs, terminal multiple, and discount rate. Adverse changes in these assumptions could lead to a change in financial outlook which may result in carrying amounts exceeding their recoverable amounts and as a consequence an impairment, which could have a material non-cash adverse effect on our results of operations;
• transportation constraints, including the impact of labour disruptions, may negatively impact our ability to meet projected shipment volumes;
• the timing of our planned capital investments may be delayed, the ultimate costs of these investments may be increased as a result of inflation, and the projected rates of return may not be achieved;
• various events that could disrupt operations, including natural, man-made or catastrophic events including drought, wildfires, cyber security incidents, any state of emergency and/or evacuation orders issued by governments, and ongoing relations with employees;
• risks inherent to customer dependence;
• implementation of important strategic initiatives and identification, completion and integration of acquisitions;
• impact of changes to, or non-compliance with, environmental or other regulations;
• government restrictions, standards or regulations intended to reduce greenhouse gas emissions and our inability to achieve our SBTi commitment for the reduction of greenhouse gases as planned;
• the costs and timeline to achieve our greenhouse gas emissions objectives may be greater and take longer than anticipated;
• changes in government policy and regulation, including actions taken by the Government of British Columbia pursuant to recent amendments to forestry legislation and initiatives to defer logging of forests deemed “old growth” and the impact of these actions on our timber supply;
• impact of weather and climate change on our operations or the operations or demand of our suppliers and customers;
• ability to implement new or upgraded information technology infrastructure;
• impact of information technology service disruptions or failures;
• impact of any product liability claims in excess of insurance coverage;
• risks inherent to a capital intensive industry;
• impact of future outcomes of tax exposures;
• potential future changes in tax laws, including tax rates;
• risks associated with investigations, claims and legal, regulatory and tax proceedings covering matters which if resolved unfavourably may result in a loss to the Company;
• effects of currency exposures and exchange rate fluctuations;
• fair values of our electricity swaps may be volatile and sensitive to fluctuations in forward electricity prices and changes in government policy and regulation;
• future operating costs;
• availability of financing, bank lines, securitization programs and/or other means of liquidity;
• continued access to timber supply in the traditional territories of Indigenous Nations and our ability to work with Indigenous Nations in B.C. to secure continued fibre supply for our lumber mills through various commercial agreements and joint ventures;
• our ability to continue to maintain effective internal control over financial reporting;
• the risks and uncertainties described in this document; and
• other risks detailed from time to time in our annual information forms, annual reports, MD&A, quarterly reports and material change reports filed with and furnished to securities regulators.

In addition, actual outcomes and results of these statements will depend on a number of factors including those matters described under “Risks and Uncertainties” in our 2024 Annual MD&A and the Q1-25 MD&A and may differ materially from those anticipated or projected. This list of important factors affecting forward–looking statements is not exhaustive and reference should be made to the other factors discussed in public filings with securities regulatory authorities.  Accordingly, readers should exercise caution in relying upon forward–looking statements and we undertake no obligation to publicly update or revise any forward–looking statements, whether written or oral, to reflect subsequent events or circumstances except as required by applicable securities laws.

Non-GAAP and Other Specified Financial Measures

Throughout this news release, we make reference to (i) certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA by segment (our “Non-GAAP Financial Measures”), and (ii) certain supplementary financial measures, including our expected capital expenditures (our “Supplementary Financial Measures”). We believe that these Non-GAAP Financial Measures and Supplementary Financial Measures (collectively, our “Non-GAAP and other specified financial measures”) are useful performance indicators for investors with regard to operating and financial performance and our financial condition. These Non-GAAP and other specified financial measures are not generally accepted financial measures under IFRS Accounting Standards and do not have standardized meanings prescribed by IFRS Accounting Standards. Investors are cautioned that none of our Non-GAAP Financial Measures should be considered as an alternative to earnings or cash flow, as determined in accordance with IFRS Accounting Standards. As there is no standardized method of calculating any of these Non-GAAP and other specified financial measures, our method of calculating each of them may differ from the methods used by other entities and, accordingly, our use of any of these Non-GAAP and other specified financial measures may not be directly comparable to similarly titled measures used by other entities. Accordingly, these Non-GAAP and other specified financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. The reconciliation of the Non-GAAP measures used and presented by the Company to the most directly comparable measures under IFRS Accounting Standards is provided in the tables set forth below. Figures have been rounded to millions of dollars to reflect the accuracy of the underlying balances and as a result certain tables may not add due to rounding impacts.

Adjusted EBITDA and Adjusted EBITDA by segment

Adjusted EBITDA is defined as earnings determined in accordance with IFRS Accounting Standards adding back the following line items from the consolidated statements of earnings and comprehensive earnings: finance income or expense, tax provision or recovery, amortization, equity-based compensation, restructuring and impairment charges, and other income or expense.

Adjusted EBITDA by segment is defined as operating earnings determined for each reportable segment in accordance with IFRS adding back the following line items from the consolidated statements of earnings and comprehensive earnings for that reportable segment: amortization, equity-based compensation, and restructuring and impairment charges.

EBITDA is commonly reported and widely used by investors and lending institutions as an indicator of a company’s operating performance, ability to incur and service debt, and as a valuation metric. We calculate Adjusted EBITDA and Adjusted EBITDA by segment to exclude items that do not reflect our ongoing operations and that should not, in our opinion, be considered in a long-term valuation metric or included in an assessment of our ability to service or incur debt.

We believe that disclosing these measures assists readers in measuring performance relative to other entities that operate in similar industries and understanding the ongoing cash generating potential of our business to provide liquidity to fund working capital needs, service outstanding debt, fund future capital expenditures and investment opportunities, and pay dividends. Adjusted EBITDA is used as an additional measure to evaluate the operating and financial performance of our reportable segments.

The following tables reconcile Adjusted EBITDA to the most directly comparable IFRS measure, earnings.

Quarterly Adjusted EBITDA
 

($ millions) 

The following tables reconcile Adjusted EBITDA by segment to the most directly comparable IFRS measures for each of our reportable segments. We consider operating earnings to be the most directly comparable IFRS measure for Adjusted EBITDA by segment as operating earnings is the IFRS measure most used by the chief operating decision maker when evaluating segment operating performance.

Quarterly Adjusted EBITDA by segment
 

($ millions) 

 

Expected capital expenditures

This measure represents our best estimate of the amount of cash outflows relating to additions to capital assets for the current year based on our current outlook. This amount is comprised primarily of various improvement projects and maintenance-of-business expenditures, projects focused on optimization and automation of the manufacturing process, and projects targeted to reduce greenhouse gas emissions. This measure assumes no deterioration in market conditions during the year and that we are able to proceed with our plans on time and on budget. This estimate is subject to the risks and uncertainties identified in the Company’s 2024 Annual MD&A and Q1-25 MD&A.

For More Information

Investor Contact

Robert B. Winslow, CFA
Director, Investor Relations & Corporate Development
Tel. (416) 777-4426
[email protected]

Media Contact

Joyce Wagenaar

Director, Communications
Tel. (604) 817-5539
[email protected]

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SOURCE West Fraser Timber Co. Ltd.