Western Forest Products (WEF) Q4 2025 earnings summary

Executive summary

• Entered 2026 with a significantly improved balance sheet and liquidity despite challenging markets and higher softwood lumber duties in 2025.

• Surpassed health and safety targets, achieving a medical incident rate of 2.7 in 2025, with several operations reporting zero recordable incidents.

• Advanced strategic priorities, including transition to higher-value products and investments in kiln capacity.

• Completed a six-year collective agreement with USW hourly employees, one of the longest in the B.C. Coast sector.

• Net loss in Q4 2025 was $17.5M, compared to a net loss of $1.2M in Q4 2024 and $61.3M in Q3 2025.

Financial highlights

• Q4 2025 Adjusted EBITDA was -CAD 6.2 million, down from CAD 14.4 million in Q4 2024, but improved from -$65.9M in Q3 2025.

• Q4 2025 revenue was $201.9M, a 26% decrease year-over-year; annual revenue for 2025 was $986.5M, down from $1,063.9M in 2024.

• Lumber shipments declined 26% and log shipments fell 34% year-over-year, impacted by lower harvest volumes and higher duties (45% vs. 14%).

• Liquidity at year-end 2025 was approximately CAD 212 million, up from $144.6M at year-end 2024, with a net debt to capitalization ratio of 7%.

• Closed Q4 with 50 million board feet of lumber inventory and 649,000 cubic meters of log inventory.

Outlook and guidance

• Lumber markets expected to remain challenged in early 2026, with no significant demand improvement anticipated in H1.

• Operating curtailments in 2025 and planned for Q1 2026 may reduce supply, potentially supporting prices as demand improves.

• U.S. mortgage rates at three-year lows could modestly stimulate housing demand.

• First quarter order file stands at approximately 78 million board feet; market demand for Q1 2026 is lower than Q4 2025.

• 2026 capital expenditures are projected at $45–$50M, including $16M for kiln projects.