West Fraser Announces Second Quarter 2026 Results
Rhea-AI Summary
West Fraser (TSX/NYSE: WFG) reported Q2 2026 sales of $1.434 billion and a net loss of $61 million or $(0.78) per diluted share, improving from a Q1 2026 loss of $188 million. Adjusted EBITDA turned positive to $59 million versus $(66) million in Q1.
Lumber delivered Adjusted EBITDA of $41 million (including a $13 million favourable duties adjustment), while NA EWP and Europe EWP each generated $13 million. Other Operating Segments posted $(8) million, mainly due to maintenance at the Cariboo pulp facility. The Henderson, Texas sawmill more than doubled production versus Q1, and the High Level, Alberta OSB mill wind-down was completed.
West Fraser generated $192 million of cash from operations, repaid $148 million of operating loans, spent $159 million on capex year-to-date, and ended Q2 with $74 million in cash and short-term investments and $55 million drawn on its $1 billion credit facility. The company declared a $0.32 per share dividend for Q3 2026 and reaffirmed 2026 shipment and capital expenditure targets despite higher oil-linked input costs and emerging tariff risks.
Positive
- Net loss narrowed to $61 million from $188 million in Q1-26
- Adjusted EBITDA improved to $59 million from $(66) million in Q1-26
- All core segments (Lumber, NA EWP, Europe EWP) posted positive Adjusted EBITDA in Q2-26
- Cash from operations of $192 million in Q2-26 enabled $148 million loan repayment
- Henderson mill more than doubled production versus Q1-26, matching prior mill output levels
- Dividend maintained with $0.32 per share declared for payment in Q3-26
Negative
- Net loss of $61 million and diluted EPS of $(0.78) in Q2-26
- Cash and short-term investments fell to $74 million from $202 million at year-end 2025
- Credit facility usage increased to $55 million drawn on $1 billion facility
- Resin and wax costs rose about $13 million in Q2-26 versus Q1-26
- Section 338 tariffs could affect roughly 3% of plywood and 20% of LVL U.S. shipments year-to-date
- High Level OSB mill operations fully wound down, reducing OSB production capacity
News Explained
West Fraser says the new
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Apr 29 | Q1 2026 earnings | Negative | +0.3% | Net loss and negative Adjusted EBITDA were reported amid duty and tariff impacts. |
| Feb 11 | Q4 2025 earnings | Negative | -1.8% | Large restructuring and impairment charges drove a substantial quarterly net loss. |
| Oct 22 | Q3 2025 earnings | Negative | -1.8% | Negative Adjusted EBITDA reflected lumber weakness and export duty expense. |
| Jul 23 | Q2 2025 earnings | Negative | -6.0% | Shipment targets were revised downward because of weaker demand and affordability challenges. |
| Apr 22 | Q1 2025 earnings | Positive | -2.3% | Positive earnings and Adjusted EBITDA were accompanied by reduced shipment targets. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings events averaged a -2.29% reaction, with three aligned declines and two divergences.
Key Terms
adjusted ebitda financial
non-gaap financial measure financial
osb technical
section 338 regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
Second Quarter Highlights
- Sales of
$1.434 billion $(61) million $(0.78) - Adjusted EBITDA1 of
$59 million 4% of sales - Lumber segment Adjusted EBITDA1 of
$41 million $13 million - North America Engineered Wood Products ("NA EWP") segment Adjusted EBITDA1 of
$13 million - Europe Engineered Wood Products ("Europe EWP") segment Adjusted EBITDA1 of
$13 million - Other Operating Segments Adjusted EBITDA of
$(8) million - Continued ramp-up of
Henderson, Texas sawmill, with production more than doubling versus the first quarter of 2026 - Completed the wind-down of operations at our
High Level, Alberta OSB mill - Generated
$192 million $148 million - Declared a
$0.32 - Released 2025 Sustainability Report
"West Fraser's second quarter results delivered continued progress against our business priorities supported by improved market conditions across most of our segments," said Sean McLaren, West Fraser's President and CEO. "Our new Henderson mill continues to ramp-up, with the mill more than doubling its output in the quarter and now operating at levels equivalent to the mill it replaced. We continue to make productivity and reliability gains in our
"We continue to focus on maintaining a strong balance sheet and being disciplined in controlling costs. This will position us to navigate the current environment and capitalize on an eventual recovery in demand. We remain constructive on the long-term outlook for residential construction, supported by an ongoing housing supply deficit in the
1. | Adjusted EBITDA is a non-GAAP financial measure. Refer to the "Non-GAAP and Other Specified Financial Measures" section of this document for more information on this measure. |
Results Summary
Second quarter sales were
Tariffs
On September 29, 2025, the
On July 20, 2026, the
For additional information, refer to the discussion in our 2025 Annual MD&A under "Risks and Uncertainties – Trade Restrictions" as supplemented by the discussion in our Q2-2026 MD&A under "Forward-Looking Statements".
Liquidity and Capital Allocation
Cash and short-term investments decreased to
Capital expenditures were
We paid
From January 1, 2026 to July 28, 2026, no shares have been repurchased under the 2026 NCIB.
Outlook
Markets
The most significant uses for our North American lumber, OSB and engineered wood panel products are residential construction, repair and remodelling and industrial applications. Over the medium term, improvements in housing affordability supported by
The seasonally adjusted annualized rate of
We anticipate continued improvement in industry demand across
Operations
Demand for lumber products is expected to remain stable in 2026, reflecting ongoing housing affordability challenges. Given the current operating environment, the 2025 sawmill closures, and the positive contributions from ongoing reliability and capital improvement gains across our lumber mill portfolio, including the ramp up of our modernized
In our NA EWP segment, we expect somewhat softer demand for our OSB products in 2026. Similar to the Lumber segment, we acknowledge risks to our demand forecasts given the near-term uncertainty from potential trade tariffs and housing affordability challenges. In light of these factors as well as the
In our Europe EWP segment, we anticipate 2026 demand for our MDF, particleboard, and OSB panel products to remain stable or show modest improvement compared to 2025 levels, while continuing to monitor macroeconomic conditions in the region. As such, we are reiterating 2026 OSB shipments targeted in the range of 1.0 to 1.25 billion square feet (3/8-inch basis).
Global events during the first quarter of 2026 contributed to an increase in oil‑based input costs, including fuels, chemicals and waxes. Resin and wax costs increased by approximately
Based on our current outlook and assuming stable market demand conditions and no further extension of lead times for ongoing or planned projects, capital expenditures for 2026 are expected to remain within the
Refer to the discussion in our 2025 Annual MD&A under "Risks and Uncertainties - Trade Restrictions" under "Risks and Uncertainties" for a detailed discussion of the risks and uncertainties associated with the imposition of tariffs, which may impact our operational guidance and our profitability during 2026.
1. | This is a supplementary financial measure. Refer to the "Non-GAAP and Other Specified Financial Measures" section of this document for more information on this measure. |
Management Discussion & Analysis ("MD&A")
Our Q2-26 MD&A and interim consolidated financial statements and accompanying notes are available on our website at www.westfraser.com and the System for Electronic Document Analysis and Retrieval + ("SEDAR+") at www.sedarplus.ca and the Electronic Data Gathering, Analysis and Retrieval System ("EDGAR") website at www.sec.gov/edgar under the Company's profile.
Risks and Uncertainties
Risk and uncertainty disclosures are included in our 2025 Annual MD&A, as updated in the disclosures in our Q1-26 and our Q2-26 MD&A, as well as in our public filings with securities regulatory authorities. See also the discussion of "Forward-Looking Statements" below.
Conference Call
West Fraser will hold an analyst conference call to discuss the Company's Q2-26 financial and operating results on Thursday, July 30, 2026, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time). To participate in the call, please dial: 1-888-510-2154 (toll-free
Following management's discussion of the quarterly results, investors and the analyst community will be invited to ask questions. The call will be recorded for webcasting purposes and will be available on the West Fraser website at www.westfraser.com.
About West Fraser
West Fraser is a diversified wood products company with more than 50 facilities in
Forward-Looking Statements
This news release includes statements and information that constitutes "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of
Forward-looking statements included in this news release include references to the following and their impact on our business:
- our plan to follow a balanced capital allocation strategy that allows us to grow while maintaining robust liquidity, increasing through cycle-resilience and creating long-term shareholder value;
- demand in North American and European markets for our products, including demand from new home construction, repairs and renovations and industrial and commercial applications;
- the impact on demand for our products resulting from the ongoing housing affordability challenges and the
U.S . administration's tariffs and other government policies; - international trade and trade restrictions, including the direct and indirect impact of Section 338 and Section 232 tariff actions;
- the impact of sustained elevated interest rates and inflationary pressures on mortgage rates and housing affordability;
- the anticipated growing market penetration of mass timber;
- the anticipated moderation of interest rates, and the potential impact of the
U.S . administration's tariff and other government policies and other competing forces on this trend; - our plans to take action to ensure our operations are flexible, sized to meet the needs of our customers, and that they continue to be managed with a strong focus on controlling costs;
- our strategy of improving our cost position across our portfolio of mills and investing to modernize our mills;
- the anticipated ongoing reliability and capital improvement gains across our lumber mill portfolio;
- the anticipated continuation of relatively stable costs across our supply chain over the near term and continued challenges on labour availability and capital equipment lead times;
- operational guidance, including projected shipments, projected capital expenditures and the potential impact of tariffs on our projections; and
- the continuation of investments in our assets and the maintenance of our balance sheet flexibility to be able to pursue a balanced capital allocation strategy and opportunistic growth objectives.
By their nature, these forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predictions, forecasts, and other forward-looking statements will not occur. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to:
- assumptions in connection with the economic and financial conditions in the
U.S .,Canada ,U.K .,Europe and globally and consequential demand for our products, including the ability to meet our shipment guidance, and variability of operating schedules and the impact of the conflicts inUkraine and theMiddle East or elsewhere; - future increases in interest rates and inflation or continued sustained higher interest rates and rates of inflation could impact housing affordability and repair and remodelling demand, which could reduce demand for our products;
- near and long-term impacts and uncertainties of
U.S . administration tariffs, including direct and indirect impacts of the Section 338 tariffs and Section 232 tariffs, and other government policies on the demand and prices of our wood products in theU.S ., the demand for products manufactured with our wood products and shipped to theU.S . and the consequential impact on the profitability of our Canadian business, financial condition, results of operations and cash flow and ability to meet our shipment guidance; - risks associated with international trade and trade restrictions, including impact of tariff actions and possible further actions from the Section 232 investigation such as potential tariffs, export controls, including quotas, or incentives to increase domestic production, future cross border trade rulings, agreements and duty rates, including the renegotiation of CUSMA and/or the failure to renew or replace CUSMA as well as the impact of other government policies, including the timing and effectiveness of affordability measures;
- global supply chain issues may result in increases to our costs and may contribute to a reduction in near-term demand for our products;
- continued governmental approvals and authorizations to access timber supply, and the impact of forest fires, infestations, environmental protection measures and actions taken and legislation adopted by government respecting Indigenous rights, title and/or reconciliation efforts on these approvals and authorizations, and evolving jurisprudence in
Canada on aboriginal rights and title; - risks inherent in our product concentration and cyclicality;
- effects of competition for logs, availability of fibre and fibre resources and product pricing pressures, including continued access to log supply and fibre resources at competitive prices and the impact of third-party certification standards; including reliance on fibre off-take agreements and third-party consumers of wood chips;
- effects of variations in the price and availability of manufacturing inputs, including energy, employee wages, resin and other input costs, and the impact of inflationary pressures on the costs of these manufacturing costs, including increases in stumpage fees and log costs;
- availability and costs of transportation services, including truck and rail services, and port facilities, and impacts on transportation services of wildfires and severe weather events, and the impact of increased energy prices on the costs of transportation services;
- the recoverability of property, plant and equipment (
$3,490 million $1,700 million - transportation constraints, including the impact of labour disruptions, may negatively impact our ability to meet projected shipment volumes;
- the timing of our planned capital investments may be delayed, the ultimate costs of these investments may be increased as a result of inflation, and the projected rates of return may not be achieved;
- various events that could disrupt operations, including natural, man-made or catastrophic events including drought, wildfires, fires, explosions, mechanical failures, cyber security incidents, any state of emergency and/or evacuation orders issued by governments, and ongoing relations with employees;
- risks inherent to customer dependence;
- implementation of important strategic initiatives and identification, completion and integration of acquisitions;
- impact of changes to, or non-compliance with, environmental or other regulations;
- government restrictions, standards or regulations intended to reduce greenhouse gas emissions and our inability to achieve our SBTi commitment for the reduction of greenhouse gases as planned;
- the costs and timeline to achieve our greenhouse gas emissions objectives may be greater and take longer than anticipated;
- changes in government policy and regulation, including actions taken by the Government of
British Columbia pursuant to recent amendments to forestry legislation and initiatives to defer logging of forests deemed "old growth" and the impact of these actions on our timber supply; - impact of weather and climate change on our operations or the operations or demand of our suppliers and customers;
- ability to implement new or upgraded information technology infrastructure;
- impact of information technology service disruptions or failures or cyber security breaches or attacks;
- impact of any product, property or general liability claims in excess of insurance coverage;
- risks inherent to a capital intensive industry;
- impact of future outcomes of tax exposures;
- potential future changes in tax laws, including tax rates;
- risks associated with investigations, claims and legal, regulatory and tax proceedings covering matters which if resolved unfavourably may result in a loss to and/or reputational issues for the Company;
- effects of currency exposures and exchange rate fluctuations;
- fair values of our electricity swaps may be volatile and sensitive to fluctuations in forward electricity prices and changes in government policy and regulation;
- future operating costs;
- availability of financing, bank lines, securitization programs and/or other means of liquidity;
- continued access to timber supply in the traditional territories of Indigenous Nations and our ability to work with Indigenous Nations in B.C. to secure continued fibre supply for our lumber mills through various commercial agreements and joint ventures;
- our ability to continue to maintain effective internal control over financial reporting;
- the risks and uncertainties described in this document; and
- other risks detailed from time to time in our annual information forms, annual reports, MD&A, quarterly reports and material change reports filed with and furnished to securities regulators.
In addition, actual outcomes and results of these statements will depend on a number of factors including those matters described under "Risks and Uncertainties" in our 2025 Annual MD&A and the Q2-26 MD&A and may differ materially from those anticipated or projected. This list of important factors affecting forward‑looking statements is not exhaustive and reference should be made to the other factors discussed in public filings with securities regulatory authorities. Accordingly, readers should exercise caution in relying upon forward‑looking statements and we undertake no obligation to publicly update or revise any forward‑looking statements, whether written or oral, to reflect subsequent events or circumstances except as required by applicable securities laws.
Non-GAAP and Other Specified Financial Measures
Throughout this news release, we make reference to (i) certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA by segment (our "Non-GAAP Financial Measures"), and (ii) certain supplementary financial measures, including our expected capital expenditures (our "Supplementary Financial Measures"). We believe that these Non-GAAP Financial Measures and Supplementary Financial Measures (collectively, our "Non-GAAP and other specified financial measures") are useful performance indicators for investors with regard to operating and financial performance and our financial condition. These Non-GAAP and other specified financial measures are not generally accepted financial measures under IFRS Accounting Standards and do not have standardized meanings prescribed by IFRS Accounting Standards. Investors are cautioned that none of our Non-GAAP Financial Measures should be considered as an alternative to earnings or cash flow, as determined in accordance with IFRS Accounting Standards. As there is no standardized method of calculating any of these Non-GAAP and other specified financial measures, our method of calculating each of them may differ from the methods used by other entities and, accordingly, our use of any of these Non-GAAP and other specified financial measures may not be directly comparable to similarly titled measures used by other entities. Accordingly, these Non-GAAP and other specified financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. The reconciliation of the Non-GAAP measures used and presented by the Company to the most directly comparable measures under IFRS Accounting Standards is provided in the tables set forth below. Figures have been rounded to the nearest million to reflect the precision of the underlying balances, which may result in minor discrepancies in the totals of certain tables due to rounding.
Adjusted EBITDA and Adjusted EBITDA by segment
Adjusted EBITDA is defined as earnings determined in accordance with IFRS Accounting Standards adding back the following line items from the consolidated statements of earnings and comprehensive earnings: finance income or expense, tax provision or recovery, amortization, equity-based compensation, restructuring and impairment charges, and other income or expense.
Adjusted EBITDA by segment is defined as operating earnings determined for each reportable segment in accordance with IFRS Accounting Standards adding back the following line items from the consolidated statements of earnings and comprehensive earnings for that reportable segment: amortization, equity-based compensation, and restructuring and impairment charges.
EBITDA is commonly reported and widely used by investors and lending institutions as an indicator of a company's operating performance, ability to incur and service debt, and as a valuation metric. We calculate Adjusted EBITDA and Adjusted EBITDA by segment to exclude items that do not reflect our ongoing operations and that should not, in our opinion, be considered in a long-term valuation metric or included in an assessment of our ability to service or incur debt.
We believe that disclosing these measures assists readers in measuring performance relative to other entities that operate in similar industries and understanding the ongoing cash generating potential of our business to provide liquidity to fund working capital needs, service outstanding debt, fund future capital expenditures and investment opportunities, and pay dividends. Adjusted EBITDA is used as an additional measure to evaluate the operating and financial performance of our reportable segments.
The following tables reconcile Adjusted EBITDA to the most directly comparable IFRS Accounting Standards measure, earnings.
Quarterly Adjusted EBITDA
($ millions)
Q2-26 | Q1-26 | |
Loss | $ (61) | $ (188) |
Finance expense, net | 9 | 53 |
Tax recovery | (28) | (61) |
Amortization | 133 | 138 |
Equity-based compensation | 5 | 6 |
Restructuring and impairment reversal | (5) | — |
Other expense (income) | 5 | (13) |
Adjusted EBITDA | $ 59 | $ (66) |
The following tables reconcile Adjusted EBITDA by segment to the most directly comparable IFRS Accounting Standards measures for each of our reportable segments. We consider operating earnings to be the most directly comparable IFRS Accounting Standards measure for Adjusted EBITDA by segment as operating earnings is the IFRS Accounting measure most used by the chief operating decision maker when evaluating segment operating performance.
Quarterly Adjusted EBITDA by segment
($ millions)
Q2-26 | Lumber | NA EWP | Europe EWP | Other | Corporate & Eliminations | Total |
Operating earnings (loss) | $ (12) | $ (47) | $ 2 | $ (11) | $ (7) | $ (74) |
Amortization | 53 | 64 | 11 | 3 | 2 | 133 |
Equity-based compensation | — | — | — | — | 5 | 5 |
Restructuring and impairment reversal | — | (5) | — | — | — | (5) |
Adjusted EBITDA by segment | $ 41 | $ 13 | $ 13 | $ (8) | $ — | $ 59 |
Q1-26 | Lumber | NA EWP | Europe EWP | Other | Corporate & Eliminations | Total |
Operating loss | $ (137) | $ (58) | $ — | $ (6) | $ (8) | $ (210) |
Amortization | 53 | 69 | 10 | 3 | 2 | 138 |
Equity-based compensation | — | — | — | — | 6 | 6 |
Adjusted EBITDA by segment | $ (84) | $ 11 | $ 10 | $ (2) | $ — | $ (66) |
Expected capital expenditures
This measure represents our best estimate of the amount of cash outflows relating to additions to capital assets for the current year based on our current outlook. This amount is comprised primarily of various improvement projects and maintenance-of-business expenditures, and projects focused on optimization and automation of the manufacturing process. This measure assumes no deterioration in market conditions during the year and that we are able to proceed with our plans on time and on budget. This estimate is subject to the risks and uncertainties identified in the Company's 2025 Annual MD&A and Q2-26 MD&A.
For More Information
Investor Contact
Anil Aggarwala
Director, Treasurer and Investor Relations
Tel. (604) 245-9718
shareholder@westfraser.com
Media Contact
Joyce Wagenaar
Director, Communications
Tel. (604) 817-5539
media@westfraser.com
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SOURCE West Fraser Timber Co. Ltd.