West Fraser rebounds from first-quarter slump as lumber operations return to positive EBITDA

West Fraser Timber Co. Ltd. reported a second-quarter 2026 loss of US$61 million, or US$0.78 per diluted share, as stronger lumber pricing and higher shipments helped the company recover substantially from a difficult first quarter.

Sales reached US$1.434 billion, up from US$1.334 billion in the first quarter but down from US$1.532 billion a year earlier. Adjusted EBITDA improved to US$59 million, representing 4% of sales, compared with negative US$66 million in the first quarter and US$84 million in the second quarter of 2025.

The lumber segment generated adjusted EBITDA of US$41 million, reversing a loss of US$84 million in the previous quarter. The result included a favourable US$13 million adjustment related to expected anti-dumping duty rates. Lumber sales rose to US$729 million from US$629 million in the first quarter, supported by higher pricing and shipment volumes.

West Fraser said production at its modernized Henderson, Texas, sawmill more than doubled from the first quarter and had reached output levels comparable with the mill it replaced. Canadian lumber production also increased 13% during the quarter as the Blue Ridge, Alberta, facility returned to normal operating rates following a fire-related shutdown.

The North America engineered wood products segment recorded adjusted EBITDA of US$13 million, while the Europe engineered wood products segment also generated US$13 million. Other operating segments reported negative adjusted EBITDA of US$8 million, largely because of maintenance at the Cariboo pulp facility.

The company completed the wind-down of operations at its High Level, Alberta, oriented strand board mill during the quarter. Management said the decision concentrates production at more modern and efficient facilities.

West Fraser generated US$192 million in cash from operations and repaid US$148 million in operating loans. Cash and short-term investments stood at US$74 million at July 3, down from US$202 million at the end of 2025. Borrowings under its US$1 billion credit facility were US$55 million.

Capital expenditures totalled US$159 million during the first six months. The company maintained its full-year capital spending forecast of US$300 million to US$350 million and declared a quarterly dividend of US$0.32 per share.

The company reiterated its 2026 shipment targets of 2.4 billion to 2.7 billion board feet for both SPF and SYP lumber. It also maintained North American OSB shipment guidance of 5.9 billion to 6.3 billion square feet and European OSB guidance of 1.0 billion to 1.25 billion square feet.

West Fraser cautioned that housing affordability, mortgage rates, tariffs and geopolitical uncertainty could continue to constrain near-term demand. President and CEO Sean McLaren said the company remains focused on cost control and maintaining a strong balance sheet while positioning itself for an eventual recovery in residential construction.