Canfor Corporation

Canfor reported second-quarter lumber adjusted EBITDA of $145 million, up $116 million from the prior quarter; these results included $16 million of one-time items, made up of restructuring and impairment charges net of a $7 million recovery of previously recorded inventory write-downs. European lumber contributed $37 million of adjusted EBITDA, while the pulp and paper business posted an adjusted EBITDA loss of $12 million, $4 million better than Q1. The company ended Q2 with approximately $1.2 billion of available liquidity and net debt, excluding the duty loan, of $316 million, with liquidity up $215 million in the quarter. For 2026, Canfor expects capital spending of about $210 million, including about $35 million for pulp, and it expects about $30 million of restructuring costs tied to Northwood and about $35 million of asset write-down and impairment charges tied to Fox Creek in Q3.

Susan Yurkovich said lumber benefited from leaner inventories, capacity rationalizations, and U.S. South transportation constraints, but she remained cautious on the near-term outlook because of weak demand conditions, trade disputes, and affordability pressure. She framed the mill closures as difficult but necessary steps to put the company on a more sustainable footing, lower capital intensity, and better align fiber supply with the operating footprint. She also highlighted the PinkWood acquisition as a way to strengthen the Western Canada asset base and increase exposure to value-added products.

Patrick Elliott emphasized the quarter’s stronger lumber performance, including $145 million of adjusted EBITDA and $37 million from Europe, where higher pricing and lower log costs helped. He also flagged $12 million of adjusted EBITDA loss in pulp and paper, $30 million of expected Q3 restructuring costs for Northwood, and a separate $35 million expected Q3 write-down and impairment for Fox Creek. On the balance sheet, he pointed to approximately $1.2 billion of liquidity and $316 million of net debt excluding the duty loan, and he said 2026 capital spending should be about $210 million before moderating after Bruza and Iron Mountain are finished.

Analysts pressed management on how much earnings upside could come from the recent closures and whether more assets are at risk. Management said no other Alberta assets are at risk, but declined to quantify the EBITDA uplift, only saying there is “more to come” and clarifying that this refers to savings in 2027 rather than additional closures. Questions also focused on North America pricing mix, Sweden log costs, freight bottlenecks in the U.S. South, and the PinkWood deal; management said wide-width pricing helped Q2, Sweden log costs are moderating, U.S. South trucking remains tight, and the PinkWood acquisition is not subject to tariffs.