Canfor (CFP) investor relations material

Executive summary

• Q1 2026 saw a net loss of $72.1 million ($0.62/share), a significant improvement from Q4 2025's net loss of $390.5 million, with adjusted operating loss narrowing to $92.5 million, driven by better lumber and pulp performance despite ongoing global demand challenges and industry capacity reductions.

• Total sales increased to $1,359.1 million from $1,282.3 million sequentially, though down from $1,417.5 million year-over-year.

• Strategic focus remains on cost competitiveness, operational efficiency, and business diversification to enhance resilience and stable returns.

• Acquired the remaining shares of Canfor Pulp Products Inc., resulting in 100% ownership.

Financial highlights

• Lumber adjusted EBITDA was CAD 29 million in Q1, up CAD 37 million from the previous quarter, excluding a CAD 20 million inventory writedown recovery.

• Adjusted shareholder net loss was $68.6 million ($0.59/share), compared to $142.3 million ($1.22/share) in Q4 2025.

• Total adjusted operating loss narrowed to $92.5 million from $145.0 million in Q4 2025.

• Amortization expense was $101.0 million in Q1 2026.

• European lumber segment posted an adjusted EBITDA loss of CAD 12 million, CAD 4 million lower than the prior quarter.

Outlook and guidance

• Global lumber markets expected to remain volatile due to trade disruptions and geopolitical risks, especially the conflict in Iran.

• North American lumber markets forecast to soften in Q2 2026 as supply increases; demand remains constrained.

• Pulp markets anticipated to stay weak with elevated inventories and subdued pricing.

• Capital expenditures forecasted at CAD 210 million for 2026, with a further reduction to around CAD 150+ million in 2027.

• Maintenance outages at pulp and paper facilities in Q2 2026 will reduce production.