Western Forest Products (WEF) investor relations material

Executive summary

• Q3 2026 Adjusted EBITDA was CAD 1.9 million versus negative CAD 65.9 million YoY; net loss was CAD 5.2 million versus CAD 61.3 million, as improved lumber prices and higher log shipments partly offset lower lumber shipments and duties.

• Adjusted EBITDA included CAD 7.7 million of business interruption insurance recovery, CAD 3.9 million of non-cash export duty receivable estimate expense, and CAD 1.2 million of share-based compensation expense.

• The post-quarter Stillwater Forest sale for approximately CAD 80 million brought the balance sheet into a net cash position; asset monetizations generated approximately CAD 180 million in gross proceeds over 24 months.

Financial highlights

• Revenue was CAD 237.0 million versus CAD 233.0 million YoY; YTD revenue was CAD 678.1 million versus CAD 784.6 million.

• Operating loss before restructuring and other items was CAD 18.8 million versus CAD 78.0 million YoY; YTD operating loss was CAD 56.2 million versus CAD 99.5 million.

• Diluted loss per share was CAD 0.44 versus CAD 5.71; YTD net loss was CAD 14.6 million versus CAD 64.9 million, with diluted loss per share of CAD 1.17 versus CAD 6.00.

Outlook and guidance

• 2026 capital spending is expected at CAD 45–50 million, including approximately CAD 23 million for kiln projects and the Duke Point autograder.

• Cowichan Bay and Chemainus sawmills are expected to remain curtailed through the rest of 2026 amid weak markets, high duties and tariffs, and BC operating conditions.

• Q4 commodity lumber prices are expected to improve, supported by higher-value treating and mat stock customers and greater focus on Canadian customers with higher net mill returns.

• Japan lumber demand is expected to remain stable in Q4; China demand is expected to strengthen toward year-end as inventories draw down ahead of Lunar New Year.

• Cedar outlook is more optimistic for 2027, with improved takeaway anticipated as duties decline in Q4 and into 2027.