West Fraser Announces Second Quarter 2025 Results

West Fraser Timber Co. Ltd. (“West Fraser” or the “Company”) reported the second quarter results of 2025 (“Q2-25”). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise. 

Second Quarter Highlights

• Sales of $1.532 billion and earnings of $(24) million, or $(0.38) per diluted share
• Adjusted EBITDA¹ of $84 million, representing 6% of sales
• Lumber segment Adjusted EBITDA¹ of $15 million
• North America Engineered Wood Products (“NA EWP”) segment Adjusted EBITDA¹ of $68 million
• Pulp & Paper segment Adjusted EBITDA¹ of $(1) million
• Europe Engineered Wood Products (“Europe EWP”) segment Adjusted EBITDA¹ of $2 million
• Renewed and extended $1 billion credit facility and increased and extended $300 million term loan
• Repurchased 448,001 shares for aggregate consideration of $33 million
• Released 2024 Sustainability Report

“Demand for many of our wood-based building products slowed in the second quarter as spring building activity fell short of our expectations. This was more acute in our NA EWP segment, which experienced further easing of demand as the quarter progressed, consistent with government data pointing to softer U.S. new home construction,” said Sean McLaren, West Fraser’s President and CEO.

“However, while uncertainty for wood building products demand persists given ongoing housing affordability challenges and the lingering prospects of higher lumber duties and tariffs on many of our products, it is important to note that we are taking action to ensure our operations are flexible, sized to meet the needs of our customers, and that they continue to be managed with a strong focus on controlling costs. Further, we continue to evaluate mill investments that upgrade our portfolio and generate returns above our cost of capital, all while maintaining strong liquidity and a balance sheet that allows us to pursue a balanced capital allocation strategy and opportunistic growth objectives should they meet 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

Second quarter sales were $1.532 billion, compared to $1.459 billion in the first quarter of 2025. Second quarter earnings were $(24) million, or $(0.38) per diluted share, compared to earnings of $42 million, or $0.46 per diluted share in the first quarter of 2025. Second quarter Adjusted EBITDA was $84 million compared to $195 million in the first quarter of 2025. 

Tariffs

Canadian softwood lumber exports to the U.S. have been the subject of trade disputes and managed trade arrangements for several decades. Countervailing and antidumping duties have been in place since April 2017. Except for a two-day window in Q1-25, our wood products imported to the U.S. have not been subject to tariffs. A Section 232 investigation by the U.S. Secretary of Commerce is ongoing to determine the effects on national security of imports of timber, lumber and their derivative products.

The actual impact of tariffs and possible actions resulting from the Section 232 investigation are subject to a number of factors and uncertainties including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the Canadian government may take, and any mitigating actions that may become available.

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 increased slightly to $646 million at June 27, 2025 from $641 million at December 31, 2024. 

Capital expenditures in the second quarter were $78 million.

We paid $25 million of dividends in the second quarter, or $0.32 per share, and declared a $0.32 per share dividend payable in the third 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 July 22, 2025, 1,094,770 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 the 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 June 2025, with permits issued of 1.40 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 later in 2025, though there are evolving risks related to the U.S. administration’s tariff and other policies, which may be inflationary and could impact rates and rate cut expectations. 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 industry demand to persist over the near term. In the longer term, we continue to expect demand for our European products will grow 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 continued to ease, 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

While the second quarter experienced some catch-up of previously delayed SYP lumber shipments caused by transportation and weather disruptions earlier in the year, the Lumber segment more broadly has experienced a slower than expected demand environment in the first half of 2025, owing primarily to continued housing affordability challenges as well as uncertainty related to impacts from the U.S. administration’s shifting tariff policies. Therefore, based on current conditions, 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 ranges of our 2025 lumber shipments targets. For SPF shipments, we are now targeting 2.6 to 2.8 billion board feet (previously 2.7 to 2.9 billion board feet) and for SYP shipments, we are now targeting 2.4 to 2.6 billion board feet (previously 2.5 to 2.7 billion board feet).

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.

In our NA EWP segment, much like the Lumber segment, the second quarter experienced some catch-up of previously delayed shipments caused by transportation challenges earlier in the year. However, the latter part of the second quarter also saw a slowing of demand for our OSB products, which continued into the third quarter. Given this trend and the ongoing risks to our demand forecasts related to trade tariffs and policy uncertainty, we are reducing the range of our 2025 North American OSB target shipments. We are now targeting shipments of 6.3 to 6.5 billion square feet (3/8-inch basis) versus our previous target of 6.5 to 6.8 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 continues 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 adverse financial impact on our Pulp & Paper segment. Further, we anticipate the Cariboo Pulp & Paper mill will be down for approximately two weeks late in the third quarter for annual maintenance.

On balance, we continued to experience relatively stable costs for inputs across our supply chain in Q2-25, 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 second half of 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, expected capital expenditures remain 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 further 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 Q2-25 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.

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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.