Western Announces Second Quarter 2025 Results

Executive Summary

• Western Forest Products Inc. reported a net loss of $17.4 million for Q2 2025, a significant deterioration from the $5.7 million loss in Q2 2024 and the $13.8 million net income in Q1 2025.
• Adjusted EBITDA dropped sharply to $0.5 million in Q2 2025 from $9.4 million in the prior year period, driven by a $3.6 million inventory provision expense due to price declines in lumber products.
• The company faces operational headwinds including a fire at the Columbia Vista Sawmill, a strike at the La-kwa sa muqw Forestry Limited Partnership, and planned production curtailments in BC sawmills for Q3 2025.

Key Details

• Financial Performance (Q2 2025):
  • Revenue: $289.1 million (down from $309.5 million in Q2 2024).
  • Adjusted EBITDA: $0.5 million (down from $9.4 million in Q2 2024; included $3.6M inventory provision expense).
  • Net Loss: $17.4 million (vs. $5.7 million loss in Q2 2024; vs. $13.8 million income in Q1 2025).
  • Diluted Loss Per Share: $(1.62).
  • Net Debt: $27.3 million (down from $84.0 million in Q2 2024).
  • Liquidity: $189.7 million (up from $141.5 million in Q2 2024).
  • Net Debt to Capitalization: 5%.
• Operational Metrics:
  • Lumber Production: 144 million board feet (vs. 151 million in Q2 2024).
  • Lumber Shipments: 149 million board feet (vs. 173 million in Q2 2024).
  • Cedar Lumber Shipments: 32 million board feet (vs. 39 million in Q2 2024).
  • Specialty Lumber Mix: 53% (vs. 51% in Q2 2024).
  • Average Lumber Selling Price: $1,464 per mfbm (vs. $1,363 per mfbm in Q2 2024).
  • Average BC Log Sales Price: $139 per m3 (vs. $155 per m3 in Q2 2024).
• Capital Projects & Strategy:
  • Two continuous dry kilns are advancing; site preparation is complete and construction has commenced.
  • Spending on one continuous dry kiln deferred from 2025 to 2026.
  • First kiln expected completion/commissioning: Early 2026.
  • Second kiln expected completion/commissioning: Mid-2026.
  • 2025 Capital Expenditure guidance reduced to $35–$40 million (down from $60–$65 million).
• Balance Sheet & Cash Flow:
  • Credit facility maturity extended to July 21, 2028.
  • Received $3.4 million income tax refund in July 2025.
• Operational Disruptions:
  • Columbia Vista Sawmill sustained extensive damage from a fire in late June 2025; mill is inoperable, and insurance/business interruption claims are being evaluated.
  • Strike commenced at La-kwa sa muqw Forestry Limited Partnership (LFLP); bargaining is ongoing.
  • Planned operating curtailments in BC sawmills for Q3 2025, including full closure of Chemainus sawmill, estimated to reduce production by ~25 million board feet.
• Regulatory & Trade:
  • US Department of Commerce published final antidumping (AD) rates of 20.56% for the sixth Administrative Review.
  • Final countervailing duty (CV) rates expected in Q3 2025; preliminary CV rate was 14.38%.
  • If final CV rates remain unchanged, Western expects to record a non-cash export tax expense of USD$43.8 million plus ~USD$7.0 million interest in Q3 2025, partially offset by a USD$58.9 million long-term duty receivable.
• Corporate Actions:
  • Share consolidation completed on July 28, 2025 (1 post-consolidation share for every 30 pre-consolidation shares); EPS figures retrospectively adjusted.

Notable Quotes

• No direct quotes from the CEO/President were included in the provided text.