Canfor (CFP) investor relations material

Executive summary

• Q2 2025 saw a net loss of $202.8M and an operating loss of $251.4M, driven by $188.6M in asset write-downs from permanent closure of Estill and Darlington sawmills and weak North American lumber pricing.

• Adjusted operating loss was $50.7M, with adjusted net loss of $67.0M; European operations delivered solid earnings, offsetting North American challenges.

• Announced acquisition of three sawmills in Central Sweden, including AB Karl Hedin Sågverk for $164M, to expand European capacity and diversify geographic footprint.

• Balance sheet and liquidity remain strong, supporting strategic growth and resilience amid challenging market and trade conditions.

• Sale of 50% interest in Arbios Biotech to Licella Holdings.

Financial highlights

• Q2 2025 sales were $1,379.4M, down 3% sequentially; adjusted operating income before amortization and impairments was $51.7M.

• Shareholder net loss was $202.8M ($1.71/share); adjusted net loss was $67.0M ($0.56/share).

• Cash from operating activities was $63.8M, up from a $70.6M outflow in Q1.

• Net debt to total capitalization was 12.6% at quarter-end, with available liquidity of $1,379.1M.

• Book value per share at June 30, 2025 was $25.98.

Outlook and guidance

• North American lumber demand expected to remain weak in Q3 2025, with gradual price improvement forecast later in the quarter.

• Global softwood pulp markets anticipated to stay weak, with high inventories and subdued demand from China.

• Anticipates significantly lower capital spending, with $240M projected for lumber and $45M for pulp in 2025.

• Ongoing focus on cost management, productivity, and leveraging global diversification to mitigate trade and economic headwinds.

• Management cautions that forward-looking statements are subject to significant risks and uncertainties.