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West Fraser reports results for fourth quarter of 2022

West Fraser Timber reported the fourth quarter results of 2022 and the annual highlights for the year. Fourth quarter sales were $1.615 billion, compared to $2.088 billion in the third quarter of 2022. Full year sales were $9.701 billion, compared to $10.518 billion in 2021.

(All dollar amounts are in USD unless noted otherwise.)

Highlights from the Q4 2022 are as follows:

• Sales of $1.615 billion and earnings of $94 million, or $1.13 per diluted share
• Adjusted EBITDA of $70 million, representing four percent of sales
• Pulp and paper segment Adjusted EBITDA of $15 million
• Repurchased 1.557 million shares for aggregate consideration of $117 million

Annual highlights  for 2022 are as follows:

• Sales of $9.701 billion and earnings of $1.975 billion, or $20.86 per diluted share
• Adjusted EBITDA of $3.212 billion, representing 33 percent of sales
• Pulp and paper segment Adjusted EBITDA of $26 million
• Repurchased 22.373 million shares for aggregate consideration of $1.990 billion

“In the fourth quarter of 2022, we faced a challenging demand market as rising interest rates dampened new home construction activity in the U.S., most acutely impacting our lumber business. Despite these market conditions, West Fraser delivered another strong year of performance in 2022, recording more than $3.2 billion of adjusted EBITDA for the period and returning nearly $2.1 billion of capital to shareholders through share repurchases and dividends. We continued to benefit from our product and geographic diversification, particularly in the fourth quarter when our North American and European engineered wood panels and pulp and paper segments each made significant positive EBITDA contributions,” said Ray Ferris, West Fraser’s president and CEO.

“Over the near term, we anticipate that the business will continue to experience moderating costs, although we expect continued labour constraints and potentially muted product demand as housing affordability and demand find a new equilibrium. Importantly, the West Fraser team has a proven track record of effectively managing through market cycles while maintaining a strong balance sheet, reinvesting in our operations and returning capital to shareholders. As we execute on our core strategy of being a low-cost producer in the key wood building products markets we serve, we will continue to prioritize financial discipline to ensure we capitalize on the favourable demand environment we expect over the medium and longer term.”