During the Q3 2023, Acadian Timber Corp. generated sales of $26.6 million, compared to $23.6 million in the prior year period. The weighted average selling price, excluding biomass, increased 1% year-over-year, benefiting from strong softwood sawlog and pulpwood prices driven by strong demand, partially offset by decreased hardwood sawlog prices stemming from weakness in hardwood lumber pricing
Net income for the Q3 2023 totaled $6.4 million, or $0.37 per share, compared to $4.8 million, or $0.29 per share, in the same period of 2022. The increase in net income compared to the prior year period was primarily the result of higher operating income and non-cash fair value adjustments, as well as lower income tax expense.
Adjusted EBITDA was $4.9 million during the Q3 2023 compared to $4.5 million in the prior year period, reflecting higher operating income and gain on sale of timberlands. Adjusted EBITDA margin for the quarter was 18% compared to 19% in the prior year period. Free Cash Flow was $4.3 million, or $1.1 million higher than the prior year period, being driven by higher Adjusted EBITDA as per above and lower current income tax expense.
“Continued stable regional demand and pricing for Acadian’s key products generated solid results for the Q3,” commented Adam Sheparski, President and CEO. “Harvest volumes were supported by improved contractor availability and favourable operating conditions in New Brunswick, while wet weather in Maine hindered operations in that region. We expect steady demand and average pricing for the remainder of the year as we continue focusing on further increasing our harvesting capacity."
During the first nine months of 2023, Acadian generated sales of $69.7 million, compared to $66.7 million in the prior year period. Sales volume, excluding biomass, was 8% lower than the first nine months of 2022 but was offset by an 8% increase in the weighted average selling price.
Operating costs and expenses of $54.4 million were $1.6 million higher year-over-year due to higher weighted average variable costs, excluding biomass, resulting primarily from higher contractor rates, partially offset by lower fuel prices. Adjusted EBITDA of $16.2 million was $2.1 million higher compared to the prior year period.
For the nine months ended September 30, 2023, net income was $17.8 million, or $1.05 per share, which represents an increase of $4.3 million compared to the prior year period, primarily the result of higher operating income, gain on sale of timberlands and non-cash fair value adjustments.
Acadian Timber Corp. is one of the largest timberland owners in Eastern Canada and the Northeastern U.S. and has a total of approximately 2.4 million acres of land under management. Acadian owns and manages approximately 761,000 acres of freehold timberlands in New Brunswick, approximately 300,000 acres of freehold timberlands in Maine and provides timber services relating to approximately 1.3 million acres of Crown licensed timberlands in New Brunswick.
