Interfor (IFP) Q1 2026 earnings summary

Executive summary

• Q1 2026 marked a significant turnaround with adjusted EBITDA of CAD 31 million, up CAD 60 million from Q4, despite a net loss of $63.3 million, as higher lumber prices and lower conversion costs offset ongoing duties and logistical constraints.

• The Thomaston, Georgia mill project was completed and ramped up ahead of expectations, expected to be a top performer in the portfolio and to reach full pro forma KPIs within four months, with a capacity of 240 million board feet annually.

• Company-wide manufacturing cost reduction initiatives target a CAD 80 million earnings improvement over two years, representing a 5% reduction in total manufacturing costs versus 2025.

• Production has increased sixfold since 2008, making the company the third largest North American lumber producer, with a regionally diversified platform and top quartile margin performance.

• Operational focus remains on optimizing working capital, reducing log inventory values, and adjusting mill schedules in response to cost and macroeconomic factors.

Financial highlights

• Adjusted EBITDA for Q1 was CAD 31 million (or $30.7 million), a sequential improvement from two negative EBITDA quarters, with an adjusted EBITDA margin of 4.8%.

• Net debt to capitalization ratio rose to 38.3% from 36.5% at year-end, with available liquidity of CAD 386 million ($385.8 million) as of March 31, 2026.

• Sales reached $643.2 million, up from $600.6 million in Q4'25 but below $735.5 million in Q1'25.

• Realized selling prices after duties and tariffs were approximately 8% higher quarter-over-quarter, with average lumber selling price at $666 per mfbm.

• Production volumes increased by 14% over Q4, mainly from U.S. Northwest operations, with lumber production at 856 million board feet.

Outlook and guidance

• Near-term North American lumber markets remain volatile due to elevated interest rates, trade uncertainty, fuel price volatility, and geopolitical factors.

• Seasonal price improvements continued into early Q2, though Southern pricing softened recently.

• Industry curtailments in 2026 are four times the pace of 2025, supporting a constructive supply-demand setup once housing and R&R activity stabilizes.

• Expectation of working capital release and reduced CapEx in Q2 and beyond, with leverage and net debt to invested capital ratios anticipated to decline.

• Diversified operations and product mix position the company to navigate ongoing market fluctuations.