Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Acadian Timber Corp (ACAZF, Financial) achieved a significant increase in total sales for 2024, reaching $116.2 million compared to $93.5 million in 2023.
- The company generated record free cash flow of $29.7 million for 2024, up from $15 million in the previous year.
- Acadian Timber Corp (ACAZF) introduced an Environmental Solutions segment, contributing $24.6 million to total sales through the sale of carbon credits.
- The company completed the acquisition of approximately 16,000 acres of timberland in New Brunswick, enhancing its operational capacity.
- Acadian Timber Corp (ACAZF) has established its own harvesting operation in Maine, aiming to expand capacity and reduce operating costs.
Negative Points
- Sales for the fourth quarter of 2024 were $20.3 million, down from $23.8 million in the same period of 2023.
- Softwood sawlog pricing decreased by 5% and hardwood sawlog pricing decreased by 10% due to weak end use markets.
- Contractor availability remained a significant challenge in Maine, impacting volumes.
- Biomass pricing decreased by 63% due to a shift from delivered sales to more roadside sales.
- Adjusted EBITDA for the fourth quarter was $3.7 million, down from $4.4 million in the prior year period, with a margin decrease from 19% to 18%.
Q & A Highlights
Q: Are you now at the scale you expect for your internal harvesting operations in Maine, or do you plan to acquire further equipment?
A: We believe the equipment we purchased, either on our own or through the acquisition that will close in Q1, puts us at scale. We expect to harvest the volumes needed to achieve our plans and expected cuts in the future. - Adam Sheparski, President, CEO
Q: How much of the harvesting will be done internally by the end of the year, and are you looking to harvest in line with your longer-term plans in Maine?
A: Most, if not all, of the harvesting will be done internally moving forward. We may use some contractors if necessary, but with our acquisitions, we can handle most of our harvesting and road work. We may rely on some trucking contractors, but that hasn't been a significant issue in Maine. - Adam Sheparski, President, CEO
Q: How should we think about progress in your real estate capabilities in 2025, including residential lot sales and renewable energy leases?
A: Real estate development takes time, but we expect to see results, particularly in residential lot sales. We may announce other plans in renewable energy or real estate development in New Brunswick and Maine as we progress. - Adam Sheparski, President, CEO
Q: Can you provide more details on the impact of contractor availability and weather conditions on your operations?
A: Contractor availability improved in New Brunswick, increasing volumes, but remained a challenge in Maine. Weather conditions, including a late start to winter and extended customer shutdowns, impacted volumes. - Susan Wood, CFO
Q: What is the outlook for timber pricing and demand in 2025?
A: Near-term hardwood and softwood sawlog demand is expected to remain stable, though pricing may be challenged until end-use markets improve. Softwood pulpwood demand and pricing are expected to remain reduced due to abundant regional sawmill residuals, while hardwood pulpwood is expected to be steady. - Adam Sheparski, President, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
