Interfor (IFP) Q4 2024 earnings summary

Executive summary

• Achieved positive operating cash flow of $144 million in 2024 despite persistent low lumber prices and a challenging market environment.

• Interfor is a top three North American softwood lumber producer, operating 28 facilities with a focus on the US South and Eastern Canada, and reported $3.0 billion in 2024 revenues.

• Strategic growth through acquisitions since 2021 has increased production capacity by 57%, with a 10-year lumber production CAGR of 6%.

• All operating regions were EBITDA positive in Q4, with adjusted EBITDA of CAD 80 million.

• Q4'24 net loss of $49.9 million, improved from Q3'24 net loss of $105.7 million and Q4'23 net loss of $169.0 million.

Financial highlights

• Q4 adjusted EBITDA reached CAD 80 million ($80.4 million), with total revenue of CAD 747 million ($746.5 million).

• Revenue increased 8% quarter-over-quarter, driven by a 16% rise in average realized lumber price; lumber sales volume remained flat.

• Adjusted EBITDA margin improved to 10.8% in Q4'24, up from -3.2% in Q3'24.

• Net debt at quarter-end was $861.3 million, or 36% of invested capital.

• Available liquidity grew to $383 million at year-end 2024; financial leverage stable at 36%.

Outlook and guidance

• 2025 expected to remain unpredictable; company is well positioned with only 25% of lumber subject to duties/tariffs.

• Near-term North American lumber markets expected to remain volatile due to economic adjustments, labor shortages, and geopolitical uncertainty.

• Conservative capital spending plan maintained, with 2025 CapEx guidance at approximately $85 million.

• Lumber price volatility expected to persist through 2025, with an inflationary tone.

• Mid-term lumber markets expected to benefit from favorable supply-demand fundamentals, with U.S. housing demand and limited supply growth.