Western Announces Third Quarter 2024 Results
VANCOUVER, British Columbia, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Western Forest Products Inc. (TSX:WEF) ("Western" or the "Company") reported a net loss of $19.6 million in the third quarter of 2024, as compared to a net loss of $17.4 million in the third quarter of 2023, and a net loss of $5.7 million in the second quarter of 2024.
Adjusted EBITDA was negative $10.7 million in the third quarter of 2024, which included $1.0 million in export tax recovery, as compared to negative $11.6 million in the third quarter of 2023, which included $4.3 million in export tax recovery, and positive EBITDA of $9.4 million in the second quarter of 2024.
(millions of Canadian dollars except per share amounts and where otherwise noted) (1)
Q32024
Q32023
Q22024
YTD2024
YTD2023
Revenue
$
241.7
$
231.1
$
309.5
$
790.7
$
770.9
Adjusted EBITDA (2)
(10.7)
(11.6)
9.4
(5.5)
(28.7)
Adjusted EBITDA margin (2)
(4%)
(5%)
3%
(1%)
(4%)
Operating loss prior to restructuring and other items
$
(24.4)
$
(25.8)
$
(4.3)
$
(46.0)
$
(69.0)
Net loss
(19.6)
(17.4)
(5.7)
(33.3)
(55.8)
Loss per share, diluted
(0.06)
(0.05)
(0.01)
(0.09)
(0.17)
Net debt (2), end of period
86.4
59.5
84.0
Liquidity (2), end of period
137.3
170.2
141.5
Net debt to capitalization (2)
13%
9%
13%
(1)
Certain figures may not add due to rounding
(2)
Refer to Adjusted EBITDA, Adjusted EBITDA margin, Liquidity and Net debt to capitalization in the Non-GAAP Financial Measures section.
Third Quarter 2024 Financial and Operational Summary
Lumber production of 127 million board feet (versus 126 million board feet in Q3 2023).
Lumber shipments of 138 million board feet (versus 130 million board feet in Q3 2023).
Japan lumber shipments of 21 million board feet (versus 19 million board feet in Q3 2023).
Specialty lumber mix of 53% (versus 55% in Q3 2023).
Average lumber selling price of $1,378 per mfbm (versus $1,388 per mfbm in Q3 2023), primarily due to a slightly weaker sales mix of specialty lumber products.
Average BC log sales price of $113 per m3 (versus $118 per m3 in Q3 2023), on weaker sales mix.
Effective August 19, 2024, the US Department of Commerce increased combined countervailing and anti-dumping duty rates to 14.40% from 8.59%.
Accelerating the Transition to Higher Value Products
The new Saltair continuous kiln continues to perform well and surpass its operating uptime and production performance targets. The continuous dry kiln has supported Western's production of higher value products, given ongoing kiln drying capacity constraints on the BC Coast, and has operated at 98.8% of full capacity utilization since commissioning in April 2024, producing 25 million board feet of higher value kiln-dried lumber.
We continue to advance pre-engineering and permitting related to two previously announced continuous dry kilns, which has included kiln vendor selection and obtaining a draft modified air discharge permit at our Duke Point facility.
Balance Sheet and Cash Flow
Near-term priority remains maintaining a strong balance sheet and financial flexibility.
Ended the quarter with liquidity of $137.3 million and a net debt to capitalization ratio of 13%.
Received our income tax refund of $23 million in Q3 2024.
2024 capital expenditure spending is anticipated to be approximately $35 million.
Cumulative duties of US Dollar ("USD") $177.7 million (CAD$240.3 million) held in trust by US Customs and Border Protection as at September 30, 2024, or approximately $0.55 per share on an after-tax basis.
Other
As previously announced, we plan to reduce lumber production in our BC sawmills by approximately 30 million board feet in Q4 2024, following reductions of approximately 30 million board feet in Q3 2024.
Market Outlook
Demand and prices for Cedar timber and premium appearance products are expected to remain stable as buyers begin to build inventories for the spring season. Demand for decking products has started to seasonally slow. Most US distribution and dealer customers are generally more cautious as we head towards year-end. Repair and renovation spending is expected to improve gradually in 2025 but remain below peak levels experienced over the last few years.
In Japan, continued softness in wooden home starts, well stocked inventories and a weaker Japanese yen to USD exchange rate are anticipated to impact lumber demand and prices in Japan into the first half of 2025.
Current improved demand and pricing for our Industrial lumber products is expected to continue through the first quarter 2025. For Commodity lumber, North American demand and prices are expected to remain flat with some fluctuations depending upon product line. In China, despite the weaker housing market, lumber prices have slightly improved on lower channel inventory levels, and we expect some modest pricing increases through the end of the year.
Management Discussion & Analysis ("MD&A")
Readers are encouraged to read our Q3 2024 MD&A and interim consolidated financial statements and accompanying notes which are available on our website at www.westernforest.com and "SEDAR+" at www.sedarplus.ca.
Risks and Uncertainties
Risk and uncertainty disclosures are included in our 2023 Annual MD&A, as updated in the disclosures in our Q3 2024 MD&A, as well as in our public filings with securities regulatory authorities. See also the discussion of ...
