WEST FRASER ANNOUNCES FIRST QUARTER 2024 RESULTS

West Fraser Timber Co. Ltd., a leading name in the timber industry, disclosed its financial results for the first quarter of 2024 today. Notably, the company achieved sales totaling $1.627 billion and posted earnings of $35 million, or $0.42 per diluted share.

Financial Highlights and Operational Changes

The quarter’s financial metrics reflect substantial improvements and strategic operations. Adjusted EBITDA reached $200 million, which constituted 12% of sales, underscoring efficient management and robust operational execution. This performance was bolstered by significant contributions from different segments: the North America Engineered Wood Products (NA EWP) segment registered an Adjusted EBITDA of $188 million, whereas the lumber and pulp & paper segments faced more modest earnings.

Moreover, the company has actively managed its assets through key strategic moves. It completed the sale of the Hinton pulp mill to Mondi Group plc and the Quesnel River and Slave Lake Pulp mills to Atlas Holdings. Additionally, it announced the dissolution of the Cariboo Pulp & Paper joint venture, taking over as the sole owner and operator. These decisions are part of West Fraser’s broader strategy to optimize its asset portfolio and reinforce its financial foundation.

Market and Operational Outlook

President and CEO Sean McLaren provided insights into the company’s performance and outlook. Despite some ongoing softness in demand, particularly in the European Engineered Wood Products (Europe EWP) and North American lumber segments, the company remains optimistic about its capacity to manage through current market conditions. The strength in new home construction in North America, a key driver of demand for OSB, plywood, and other engineered wood products, has continued to support the company’s strong performance in these areas.

For the future, West Fraser expects several macroeconomic and demographic factors to bolster demand for new home construction and renovations in North America. The company also anticipates increased adoption of mass timber in industrial and commercial applications, representing a potential growth area for its products.

Capital Allocation and Shareholder Returns

Reflecting on capital management, the company reported a decrease in cash and short-term investments, from $900 million at the end of 2023 to $711 million at the end of the first quarter. Nevertheless, it continues to return value to shareholders, having paid $24 million in dividends during the quarter and declared a similar dividend payable in the second quarter of 2024.

 

You might also like