GreenFirst Forest Products Inc. announced results for the Q2 ended June 29, 2024. Adjusted EBITDA for Q2 2024 was negative $12.1 million compared to negative $3.5 million in Q1 2024. Both the lumber and paper operations had a negative contribution to Q2 2024 as a result of weak market conditions.
Q2 2024 net loss from continuing operations was $14.5 million or $0.08 per share (diluted), compared to net loss of $13.4 million or loss of $0.08 per share (diluted) in Q1 2024.
Lumber sales volumes in Q2 2024 were lower than Q1 2024 due to the continued drag on lumber demand as housing affordability remains significantly impacted by high mortgage rates. There also remain an oversupply of lumber, which resulted in lower field takeaways. Average realized lumber prices of $637/mfbm for Q2 2024 were also lower than the $644/mfbm pricing realized in Q1 2024. Benchmark prices continued to be under pressure subsequent to Q2 2024. The recent cuts by the Bank of Canada is signalling a reversal in monetary policy.
“We continue to see macroeconomic pressures impacting our business as lumber prices regressed during Q2 2024. It is times like this where we must focus on things we can control and I am proud of the team’s operational accomplishments in our sawmills which continued to see production records being established in the first half of 2024. We also continue to manage liquidity on all fronts through this down cycle, including focusing on sale of non-core assets to better position the Company.” said Joel Fournier, GreenFirst’s Chief Executive Officer. “On the paper side, as part of our previously announced decentralization efforts for this business, we plan to complete a spin-out transaction which will result in Kap gaining operational independence and flexibility to consider independent financing alternatives and partnerships in the future, such as the Kap Term Loan. This will also enable GreenFirst to focus on its core business of being a pure-play lumber producer. We also saw continued stabilization of paper operations following a challenging couple quarters.”
GreenFirst Forest Products is a forest-first business, focused on sustainable forest management and lumber production.
