West Fraser Announces Fourth Quarter 2024 Results

West Fraser Timber Co. Ltd. (“West Fraser” or the “Company”) reported the fourth quarter results of 2024 (“Q4-24”). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise. 

Fourth Quarter Highlights? 

• Sales of $1.405 billion and loss of $62 million, or $(0.80) per diluted share
• Adjusted EBITDA¹ of $140 million, representing 10% of sales 
• Lumber segment Adjusted EBITDA¹ of $21 million  
• North America Engineered Wood Products (“NA EWP”) segment Adjusted EBITDA¹ of $127 million
• Pulp & Paper segment Adjusted EBITDA¹ of $(10) million 
• Europe Engineered Wood Products (“Europe EWP”) segment Adjusted EBITDA¹ of $2 million
• Repurchased 311,523 shares for aggregate consideration of $27 million

Annual Highlights

• Sales of $6.174 billion and loss of $5 million, or $(0.07) per diluted share
• Adjusted EBITDA¹ of $673 million, representing 11% of sales 
• Lumber segment Adjusted EBITDA¹ of $(82) million, including $32 million of export duty expense attributable to finalization of AR5  
• North America Engineered Wood Products (“NA EWP”) segment Adjusted EBITDA¹ of $744 million
• Pulp & Paper segment Adjusted EBITDA¹ of $4 million 
• Europe Engineered Wood Products (“Europe EWP”) segment Adjusted EBITDA¹ of $8 million
• Repurchased 1,799,217 shares for aggregate consideration of $144 million

“The fourth quarter of 2024 saw continued resiliency in our NA Engineered Wood Products business, where supply and demand fundamentals remained relatively well balanced on the back of solid new home construction demand. We also realized modest improvement in our Lumber segment this quarter as we monetized some of the benefits of our portfolio optimization strategy that allowed us to migrate more production from higher cost to lower cost mills within our platform. In Europe and the U.K., we continued to experience somewhat challenging markets as that region appears to be undergoing a protracted recovery,” said Sean McLaren, West Fraser’s President and CEO.

“Relatively high mortgage rates remain an affordability challenge for consumers and housing markets, impacting demand for our wood building products. Further, potential for the U.S. administration to impose broad-based tariffs on Canadian exports adds another element of demand uncertainty for the products we ship to the U.S. from Canada. However, while we cannot control the threat of such tariffs, we can be proactive, creating a stronger organization with a continued focus on improving the cost position across our mill portfolio and investing capital to modernize mills where it makes sense. You should also expect West Fraser to continue to return excess capital to shareholders when prudent, and maintain a strong balance sheet that will provide us with the financial flexibility to take advantage of opportunities that fit our long-term strategy.”

1.	Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Results Summary 

Fourth quarter sales were $1.405 billion, compared to $1.437 billion in the third quarter of 2024. Fourth quarter loss was $62 million, or $(0.80) per diluted share, compared to a loss of $83 million, or $(1.03) per diluted share in the third quarter of 2024. The fourth quarter loss includes a non-cash impairment loss of $70 million in relation to Europe EWP goodwill. Fourth quarter Adjusted EBITDA was $140 million compared to $62 million in the third quarter of 2024. 

Full year sales were $6.174 billion, compared to $6.454 billion in 2023. Full year loss was $5 million, or $(0.07) per diluted share, compared to a loss of $167 million, or $(2.01) per diluted share in 2023. Restructuring and impairment charges of $102 million were recorded in 2024 as compared to $279 million recorded in 2023. Restructuring and impairment charges in 2024 include a non-cash impairment loss of $70 million in relation to Europe EWP goodwill. Adjusted EBITDA was $673 million in 2024 compared to $561 million in 2023.

Liquidity and Capital Allocation 

Cash and short-term investments decreased to $641 million at December 31, 2024 from $900 million at December 31, 2023, principally as a result of the repayment of our $300 million senior notes in the quarter. 

Capital expenditures in the fourth quarter were $156 million. Full year capital expenditures were $487 million in 2024 and $477 million in 2023.

We paid $26 million of dividends in the fourth quarter, or $0.32 per share, and declared a $0.32 per share dividend payable in the first quarter of 2025. We paid $101 million of dividends in 2024.

We repaid the principal and accrued interest on our $300 million senior notes on maturity with cash on hand in the fourth quarter.

In the fourth quarter of 2024, we repurchased 311,523 shares under our current normal course issuer bid (“2024 NCIB”) for aggregate consideration of $27 million. For the full year, we repurchased 1,799,217 shares under the 2023 and 2024 NCIBs for aggregate consideration of $144 million. As of February 11, 2025, 1,989,825 shares have been repurchased under the 2024 NCIB, leaving 1,981,555 shares available for purchase at our discretion until the expiry of the 2024 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 1.50 million units in December 2024, 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 most recent rate hiking cycle is generally believed to be over as the U.S. central bank recently began to cut rates and Federal funds futures indicate prospects for one additional rate cut by the end of 2025, though there are evolving risks related to the new U.S. administration’s tariff and other policies, which could be inflationary. 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 a relatively modest market recovery 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 and the lagged impact of prior inflationary pressures may adversely impact near-term demand for our panel products in the U.K. and Europe. 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 Company is providing the following operational guidance for 2025:

• Spruce-pine-fir (“SPF”) shipments are targeted to be 2.7 to 3.0 billion board feet
• Southern yellow pine (“SYP”) shipments are targeted to be 2.5 to 2.8 billion board feet
• N.A. OSB shipments are targeted to be 6.5 to 6.9 billion square feet (3/8-inch basis)
• European and U.K. OSB shipments are expected to be 1.0 to 1.25 billion square feet (3/8-inch basis) 
• Costs for inputs, including resins and chemicals, are expected to remain relatively stable, while contract labour availability and capital equipment lead times are expected to continue to improve
• Capital expenditures are expected to be $400 million to $450 million¹

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” 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.

1.	This is a supplementary financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Dividend Declared 

The Board of Directors of the Company has declared a dividend of $0.32 per share on the Common shares and the Class B Common shares in the capital of the Company, payable on April 3, 2025 to shareholders of record on March 14, 2025. Dividends are designated to be eligible dividends pursuant to subsection 89(14) of the Income Tax Act (Canada) and any applicable provincial legislation pertaining to eligible dividends. Dividends are declared and payable in U.S. dollars. Shareholders may elect to receive their dividends in Canadian dollars. Details regarding the election procedure are available on our website at www.westfraser.com in the “Investors/Stock Information/Dividends” section.

Management Discussion & Analysis (“MD&A”) 

Our 2024 Annual MD&A and audited annual 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. 

Sustainability Report 

West Fraser’s 2023 Sustainability Report is available on the Company’s website at www.westfraser.com. This report summarizes our Environmental, Social, and Governance (“ESG”) performance with a focus on our people, communities and role of our products in the carbon cycle. It is aligned with the Sustainable Accounting Standards Board (“SASB”), Global Reporting Initiative (“GRI”), the Task Force on Climate-Related Financial Disclosures (“TCFD”) and CDP (formerly the Carbon Disclosure Project). 

Risks and Uncertainties 

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

For full results click here.

About West Fraser

West Fraser is a diversified wood products company with more than 60 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, other residuals, and renewable energy. West Fraser’s products are used in home construction, repair and remodelling, industrial applications, papers, tissue, and box materials. For more information about West Fraser, visit www.westfraser.com.

Contact:

Joyce Wagenaar – Director, Communications – media@westfraser.com – (604) 817-5539

Source: West Fraser Timber Co. Ltd.