The following is a summary of the West Fraser Timber Co. Ltd. (WFG) Q2 2024 Earnings Call Transcript:

Financial Performance:

• West Fraser reported a Q2 2024 adjusted EBITDA of $272 million with a 16% margin, and $894 million over the past four quarters, showing substantial improvements from previous periods.

• The lumber segment faced challenges with a loss of $51 million in adjusted EBITDA, contrasting the positive $10 million in Q1 2024.

• The North American engineered wood products (EWP) segment posted strong performance with $308 million in adjusted EBITDA, up from $188 million in Q1.

• Total liquidity was reported at $2 billion, enhancing the company's financial flexibility and strength.

Business Progress:

• Engineered wood products in North America are driving strong performance and growth.

• Strategies include curing production at higher cost mills and shifting towards more competitive and lower-cost facilities.

• Active management of operating strategies to adapt to market conditions, expecting reduced Southern Yellow Pine shipments as market challenges persist.

• Continued ramp-up at Allendale OSB with good cost progression and anticipation of it becoming one of the lowest-cost mills.

Opportunities:

• Geographic and product diversification mitigates the impact of cyclical lumber market conditions and drives EBITDA.

• The reduced guidance for 2024 Southern Yellow Pine shipments to between 2.5 to 2.7 billion board feet reflects strategic production adjustments to align with market demand.

Risks:

• Continued weak market conditions for lumber, particularly Southern Yellow Pine, influencing operational strategies and financial performance.

• Potential increased softwood lumber duties, with anticipated duty expense adjustment impacting future financial periods.

More details: West Fraser Timber IR

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