Western Forest Products (WEF) Q4 2025 earnings summary

Executive summary

• Entered 2026 with an improved balance sheet and liquidity despite challenging markets and higher softwood lumber duties in 2025.

• Surpassed health and safety targets, achieving a medical incident rate of 2.7 in 2025, with several operations reporting zero recordable incidents.

• Advanced strategic priorities, including transition to higher-value products and operational improvements in log and lumber recovery.

• Specialty products made up 52% of sales in 2025, and kiln-dried sales reached a record 41% of total sales.

• Completed a six-year collective agreement with USW hourly employees, one of the longest in the B.C. Coast sector.

Financial highlights

• Q4 2025 Adjusted EBITDA was -CAD 6.2 million, down from CAD 14.4 million in Q4 2024, but improved from -CAD 65.9 million in Q3 2025.

• Q4 2025 revenue was CAD 201.9 million, a 26% decrease year-over-year; annual revenue for 2025 was CAD 986.5 million, down from CAD 1,063.9 million in 2024.

• Lumber shipments fell 26% and log shipments dropped 34% year-over-year in Q4, impacted by lower harvest volumes and higher duties (45% vs. 14%).

• Liquidity at year-end 2025 was approximately CAD 212 million, with a net debt to capitalization ratio of 7%.

• Net loss in Q4 2025 was CAD 17.5 million, compared to a net loss of CAD 1.2 million in Q4 2024.

Outlook and guidance

• 2026 CapEx expected between CAD 45–50 million, including CAD 16 million for new kilns.

• Lumber markets remain challenged into 2026, with no significant demand improvement expected in H1.

• Operating curtailments in 2025 and planned for Q1 2026 may reduce supply, potentially supporting prices as demand improves.

• U.S. mortgage rates at three-year lows could modestly stimulate housing demand.

• First quarter order file is approximately 78 million board feet; market demand for Q1 2026 is lower than Q4 2025.