Interfor Reports Q1'26 Results

• Financial Performance: Interfor reported a net loss of $63.3 million ($0.96 per share) for Q1 2026, widening from the $35.1 million loss in Q1 2025. However, Adjusted EBITDA improved significantly to a profit of $30.7 million (4.8% margin), compared to a loss of $29.2 million in Q4 2025.
• Revenue: Total sales declined year-over-year to $643.2 million from $735.5 million in Q1 2025, indicating reduced volume or pricing pressure despite higher average selling prices ($666 per mfbm).
• Operational Metrics: Lumber production increased to 856 million board feet (up from 753 million in Q4 2025), but shipments were slightly lower at 806 million board feet.
• Trade & Tariffs: The U.S. Department of Commerce issued preliminary combined all others duty rates of 24.83%. Management expects a non-cash incremental expense of approximately US$73 million in the second half of 2026 due to these rates.
• Asset Dispositions: Recorded an $11.4 million impairment charge and a $27.2 million loss on disposal related to the sale of certain U.S. South operations.
• Curtailments: Permanent curtailment of the Ear Falls, Ontario sawmill; Nairn and Gogama sawmills curtailed in April 2026. The Thomaston, GA sawmill rebuild is ramping up toward 240 million board feet capacity.

• EBITDA Turnaround: The shift from a Q4 loss to a Q1 profit in Adjusted EBITDA ($-29M to +$30M) is operationally positive, suggesting cost controls and production curtailments are helping cash flow generation before duties.
• Net Loss Deterioration: Despite operational improvement, the net loss widened significantly year-over-year ($35M to $63M). This indicates that non-operational costs (interest, impairments, or duty accruals) continue to erode bottom-line profitability.
• Future Expense Overhang: The confirmation of a US$73 million non-cash expense in H2 2026 is material but largely consistent with the Q3'25 guidance where C$147M in duties were already recognized. This removes uncertainty regarding the magnitude of the duty hit for the second half, preventing surprise upside.
• Revenue Decline: The drop in sales ($92M YoY decline) signals that production curtailments and market weakness are impacting top-line growth more than anticipated, limiting the benefit of higher selling prices.
• Liquidity Position: Liquidity improved to $385.8 million (up from $247.9M in Q3'25), providing a buffer against the debt load, but does not eliminate the fundamental duty risk.

• Company: Interfor Corporation is a leading North American forest products company engaged in the production of lumber, pulp, and paper.
• Flagship Projects: The primary operational focus includes sawmills in Canada (BC, Ontario) and the U.S. (Pacific Northwest, South).
• Key Development: The multi-year rebuild of the Thomaston, GA sawmill is a critical strategic project currently ramping up to 240 million board feet per year capacity. This asset is intended to diversify geographic exposure away from Canadian curtailments and duty risks.
• Operational Changes: Significant production reductions have been implemented in Ontario (Ear Falls, Nairn, Gogama) due to market conditions and duty impacts, shifting focus toward U.S. operations where feasible.