West Fraser Announces First Quarter 2025 Results

West Fraser Timber Co. Ltd. (“West Fraser” or the “Company”) reported the first quarter results of 2025 (“Q1-25”). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise. 

First Quarter Highlights

• Sales of $1.459 billion and earnings of $42 million, or $0.46 per diluted share
• Adjusted EBITDA¹ of $195 million, representing 13% of sales
• Lumber segment Adjusted EBITDA¹ of $66 million
• North America Engineered Wood Products (“NA EWP”) segment Adjusted EBITDA¹ of $125 million
• Pulp & Paper segment Adjusted EBITDA¹ of $7 million
• Europe Engineered Wood Products (“Europe EWP”) segment Adjusted EBITDA¹ of $(2) million
• Repurchased 529,660 shares for aggregate consideration of $44 million

“In many respects, the first quarter of 2025 was a continuation of the more balanced supply and demand fundamentals we have experienced in recent quarters. While still operating well below mid-cycle economics, our Lumber segment posted its best quarter in more than two years, supported in part by the impact of our mill curtailments and closures as well as the benefits we have realized with our portfolio optimization strategy that shifts a greater proportion of production to our lower cost mills,” said Sean McLaren, West Fraser’s President and CEO.

“Demand uncertainty for wood building products persists more broadly given ongoing housing affordability challenges, and this has only been magnified recently by a U.S. administration that has both threatened and imposed higher lumber duties and punitive tariffs on many of the products we export from Canada to the U.S. These challenges aside, we continue to focus on the controllables so that we may be better prepared for an eventual market recovery. We are removing costs and investing capital to modernize mills where practical, maintaining a defensive balance sheet and strong liquidity, and executing on a balanced capital allocation strategy so we may be opportunistic in pursuit of our long-term growth 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

First quarter sales were $1.459 billion, compared to $1.405 billion in the fourth quarter of 2024. First quarter earnings were $42 million, or $0.46 per diluted share, compared to a loss of $62 million, or $(0.80) per diluted share in the fourth quarter of 2024. The fourth quarter included a non-cash impairment loss of $70 million in relation to Europe EWP goodwill. First quarter Adjusted EBITDA was $195 million compared to $140 million in the fourth quarter of 2024.

Tariffs

On March 1, 2025, the U.S. administration issued an executive order directing the Secretary of Commerce to initiate a Section 232 investigation to determine the effects on national security of imports of timber, lumber and their derivative products. The executive order requires the Secretary of Commerce to submit a report to the U.S. president within 270 days with findings and recommendations on actions to mitigate any such threats, such as potential tariffs, export controls, including quotas, or incentives to increase domestic production.

Between March 4, 2025 and March 6, 2025, 25% tariffs were imposed on our wood products shipped from Canada to the U.S., including lumber, OSB, plywood, MDF, and pulp. On March 6, 2025, the U.S. administration signed an executive order temporarily pausing tariffs on Canadian goods compliant with the United States-Mexico-Canada Agreement (“USMCA”) until April 2, 2025. Included in the USMCA are products such as lumber, OSB, plywood, MDF, and pulp.

On April 2, 2025, the U.S. administration issued an executive order imposing tariffs beginning at 10% on all imports into the U.S. from all countries, but with much higher rates for many. While Canada was not exempt, goods compliant with the USMCA are not subject to these additional tariffs.

Refer to the discussion in our 2024 Annual MD&A under “Risks and Uncertainties – Trade Restrictions” as supplemented by the discussion in our Q1-25 MD&A under “Risks and Uncertainties” for discussion of risks associated with the aforementioned tariffs and possible actions resulting from the Section 232 investigation.

Liquidity and Capital Allocation 

Cash and short-term investments decreased to $390 million at March 28, 2025 from $641 million at December 31, 2024, primarily due to the expected seasonal log inventory build. 

Capital expenditures in the first quarter were $104 million.

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

On February 27, 2025, we renewed our normal course issuer bid (“2025 NCIB”) allowing us to acquire up to 3,868,177 Common shares for cancellation from March 3, 2025 until the expiry of the bid on March 2, 2026. From January 1, 2025 to April 21, 2025, 637,258 shares have been repurchased under both the prior NCIB and the 2025 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 1.32 million units in March 2025, 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 U.S. central bank has cut its key lending rate a total of 100 bps since September 2024 and Federal funds futures indicate prospects for additional rate cuts in mid-2025, though there are evolving risks related to the U.S. administration’s tariff and other policies, which could be inflationary and could impact this trend in rates. 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 challenging markets to persist 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, including the potential price inflation of U.S. tariffs on the U.K. and Europe, may adversely impact near-term demand for our panel products in the region. 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 Lumber segment has experienced a slower than expected start to the year, owing to transportation and weather challenges that have influenced shipments as well as uncertainty related to demand impacts from the U.S. administration’s shifting tariff policies. As such, and based on what we can see today, including the mill closures and indefinite curtailments we announced last year and the uncertainties around the impact of tariffs, offset in part by the ongoing reliability and capital improvement gains across our lumber mill portfolio, we are reducing the top-end of the ranges of our 2025 lumber shipments targets. For SPF shipments, we are now targeting 2.7 to 2.9 billion board feet (previously 2.7 to 3.0 billion board feet) and for SYP shipments, we are now targeting 2.5 to 2.7 billion board feet (previously 2.5 to 2.8 billion board feet).

Our NA EWP segment, much like the Lumber segment, has experienced transportation challenges early in 2025, which have in some instances limited our ability to ship OSB to meet customer demand. Given these constraints and the ongoing risks to our demand forecasts because of trade tariffs and policy uncertainty, we are reducing the top-end of the range of our 2025 North American OSB target shipments. We are now targeting shipments of 6.5 to 6.8 billion square feet (3/8-inch basis) versus our previous target of 6.5 to 6.9 billion square feet (3/8-inch basis).

In our Europe EWP segment, we continue to expect demand to improve for our MDF, particleboard and OSB panel products in 2025, recognizing there are ongoing macroeconomic uncertainties surrounding interest rates and economic growth in the region. As such, we reiterate guidance for 2025 OSB shipments in the range of 1.0 to 1.25 billion square feet (3/8-inch basis).

The global pulp market has begun to experience disruption with the economic impact of U.S. tariffs creating considerable demand uncertainty in Chinese markets. As such, we anticipate NBSK pricing weakness over the near- to medium-term and a potentially significant adverse financial impact on our Pulp & Paper segment.

On balance, we continued to experience relatively stable costs for inputs across our supply chain in Q1-25, including resins and chemicals, and contract labour availability and capital equipment lead times continued to show improvement. We expect these trends to largely continue in 2025.

Based on our current outlook, assuming no deterioration from current market demand conditions during the year and no additional lengthening of lead times for projects underway or planned, we continue to anticipate capital expenditures in the range of $400 million to $450 million in 2025¹.

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” and in our Q1-25 MD&A under “Risks and Uncertainties” 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.

Management Discussion & Analysis (“MD&A”) 

Our Q1-25 MD&A and interim 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. 

Risks and Uncertainties 

Risk and uncertainty disclosures are included in our 2024 Annual MD&A, as updated in the disclosures in our Q1-25 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.