Stella-Jones (SJ) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales were CAD 950 million (USD 915 million), down 4% year-over-year, mainly due to lower volumes across all product categories, though long-term demand drivers remain strong.

• Operating income was CAD 130 million; EBITDA was CAD 162 million with a 17.7% margin, reflecting solid cost management despite lower sales.

• Year-to-date sales reached CAD 2.7 billion (USD 2,739 million), with profit margins above target levels.

• Updated three-year sales target to approximately CAD 3.6 billion (USD 3.6 billion) by 2025, with EBITDA margin guidance raised to over 17%.

• Acquisition-driven growth remains a strategic focus, supported by a strengthened financial position.

Financial highlights

• Q3 sales were CAD 950 million (USD 915 million), down 4% year-over-year, mainly due to lower volumes across all product categories.

• Q3 EBITDA was CAD 162 million (USD 162 million) with a margin of 17.7%, compared to 20.3% in Q3 2023.

• Year-to-date sales rose 4% to CAD 2.7 billion (USD 2,739 million); EBITDA reached CAD 518 million with an 18.9% margin.

• Operating cash flows for Q3 were CAD 186 million, totaling CAD 301 million year-to-date.

• Net income for Q3 2024 was USD 80 million ($1.42 per share), down from USD 110 million ($1.91 per share) in Q3 2023.

Outlook and guidance

• Three-year sales target set at CAD 3.6 billion (USD 3.6 billion) by 2025, revised from above CAD 3.6 billion.

• Utility pole organic sales growth expected at 6%-7% for 2024 and 2025, driven primarily by volume.

• EBITDA margin guidance increased to over 17% as a new floor, with 2024 margin forecast closer to 18%.

• Residential lumber sales forecasted in the CAD 600–650 million range.

• Guidance assumes stable FX rates and excludes future acquisitions.