- West Fraser Timber (WFG, Financial) reported Q1 2025 earnings of $42 million with a 39% increase in EBITDA compared to the previous quarter.
- New U.S. tariffs on Canadian wood products impact WFG’s operations with potential challenges in the Pulp & Paper segment.
- WFG anticipates capital expenditures of $400 to $450 million in 2025, indicating confidence in long-term strategy.
West Fraser Timber Co. Ltd. (WFG) has announced its first quarter results for 2025, showcasing a positive financial turnaround despite encountering market challenges. The company reported sales of $1.459 billion and earnings of $42 million, or $0.46 per diluted share, a significant improvement from a loss of $62 million in the previous quarter. Adjusted EBITDA reached $195 million, representing 13% of sales, an increase from $140 million in Q4 2024.
The Lumber segment delivered an Adjusted EBITDA of $66 million, marking its best performance in over two years. North American Engineered Wood Products (NA EWP) saw an impressive Adjusted EBITDA of $125 million, while the Pulp & Paper segment contributed $7 million. However, challenges persisted in Europe, where the Engineered Wood Products segment experienced a loss of $2 million.
Amid these earnings, West Fraser faced significant challenges, particularly from new U.S. tariffs on Canadian wood products, starting at 10%. These tariffs have prompted the company to revise its 2025 shipment targets downward due to uncertainties and transportation issues. The tariffs could potentially have an adverse impact on profitability, especially in the Pulp & Paper segment.
West Fraser's cash position decreased to $390 million from $641 million, largely due to seasonal log inventory build. Despite this reduction, the company has continued its strategic focus, allocating $104 million in capital expenditures, $26 million in dividends ($0.32 per share), and repurchasing 529,660 shares for a total of $44 million.
Looking ahead, West Fraser remains optimistic about its capital expenditure plans, projecting $400 to $450 million for 2025, assuming stable market conditions. This figure underscores the company’s commitment to maintaining robust operations and strategic growth, even amid evolving U.S. trade policies.
