Interfor (IFP) Q4 2025 earnings summary

Executive summary

• 2025 was marked by historically weak lumber prices, significant market volatility, and a net loss of $104.6 million in Q4'25, but operational discipline and liquidity improvements were achieved.

• Portfolio actions included permanent closure of two high-cost U.S. South mills, significant inventory reductions, and asset write-downs.

• The final phase of the Thomaston Mill in Georgia is nearing completion, expected to enhance long-term cost structure.

• Employee turnover improved for the second consecutive year, especially in the U.S. South.

• Top three North American softwood lumber producer with 26 facilities and a diversified geographic footprint, including significant exposure to the US South and Eastern Canada.

Financial highlights

• 2025 revenues reached $2.8 billion, with 84% from softwood lumber, 8% from by-products, and 4% each from other wood products and logs.

• Q4 2025 Adjusted EBITDA was negative CAD 29 million, an improvement from negative CAD 36 million in Q3 after normalizing for non-cash duty expenses.

• Q4'25 sales were $600.6 million, down from $746.5 million in Q4'24 and $689.3 million in Q3'25.

• Net debt to capitalization ratio at year-end was 36.5%, with pro forma available liquidity of CAD 482 million.

• Maintained strong cash flow and disciplined capital deployment, with ~$2.5 billion reinvested and ~$636 million returned to shareholders from 2020 to 2025.

Outlook and guidance

• 2026 capital spending expected at CAD 75–80 million, with 2027 preliminary estimate at CAD 60 million, focused on maintenance.

• Free cash flow will be directed solely toward leverage reduction; timing depends on lumber prices and market conditions.

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

• Early signs of lumber market improvement noted, but planning assumptions remain conservative.

• Multi-year capex plan targets mill upgrades and optimization to sustain high-margin operations.