In This Article:
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Adjusted EBITDA: $14.4 million in Q4 2024, compared to negative $1.2 million in Q4 2023.
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Gross Margin: Incremental gross margin in excess of $6 million in 2024.
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Wholesale Lumber Shipment Growth: 58% year-over-year increase.
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CapEx Spending: Expected to be between $60 million to $65 million in 2025.
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Liquidity: Approximately $145 million at the end of Q4 2024.
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Net Debt to Capital Ratio: 12% at the end of Q4 2024.
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Inventory: 63 million board feet of lumber and 838,000 cubic meters of log inventory at the end of Q4 2024.
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Duties on Deposit: Approximately $264 million, equating to $0.61 per share after tax.
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Expected Accounting Gain: Approximately $23 million in Q1 2025 from the sale of private timberlands.
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Continuous Dry Kiln Investment: $13 million with expected EBITDA payback of less than two years.
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Automated Grading Equipment Investment: $4.6 million with expected EBITDA payback of less than two years.
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Slabber Head Investment: $5.7 million with expected EBITDA payback of approximately three years.
Release Date: February 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Western Forest Products Inc (WFSTF) delivered significantly improved results in the fourth quarter and full year of 2024 compared to 2023.
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The company achieved a gross margin increase of over $6 million through strategic initiatives in timberlands and manufacturing.
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Operational uptime improved to 85% in 2024 from 83% in 2023, enhancing log and lumber recovery.
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The company successfully executed capital investments, including a continuous dry kiln and automated grading equipment, with expected quick payback periods.
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Western Forest Products Inc (WFSTF) ratified a new six-year collective agreement with the USW, one of the longest-term agreements in the BC coastal forest sector.
Negative Points
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The company faced a weaker lumber sales mix and lower external log sales due to reduced harvest levels.
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Increased softwood lumber duties negatively impacted financial results.
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The North American Cedar market is expected to experience shortages, potentially leading to price increases.
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The company is facing potential challenges from a new 25% US tariff on Canadian imports, adding to existing softwood lumber duties.
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The Japanese market remains challenging due to a weaker yen and low construction activity, affecting pricing.
Q & A Highlights
Q: Can you discuss the current demand for Cedar and how tight the market might be in Q2? A: Bruce Alexander, Senior Vice President of Sales, Marketing, and Manufacturing, noted that demand for Cedar increased in the fourth quarter, and the first quarter is already booked with major distributors. The market is currently holding back slightly due to pending US tariffs, but production levels are expected to meet demand due to a well-positioned log supply.