Conifex Timber Inc.

Conifex reported a Q2 2026 net loss of $9.5 million, compared with a $9.4 million loss in Q1, and per-share loss of $0.23 in both periods. EBITDA loss in Q2 was $6.3 million, improving by $1.4 million from a Q1 EBITDA loss of $7.7 million. Lumber production in the first half of 2026 was 35.8 million board feet, implying about 30% capacity utilization. No formal revenue guidance was given; instead, management said it expects the integrated Mackenzie lumber and power site to be EBITDA positive in 2026 if it secures financing, restarts winter logging, reaches 2-shift operations before year-end, and duty deposit rates decline as expected.

Ken Shields framed 2026 as a deliberate transition year, with curtailments used to conserve cash and limit EBITDA losses during a period of high duties and weak lumber prices. He emphasized that the key near-term task is securing additional capital so the company can restart logging, rebuild inventory, run 2 shifts, and restart the power plant. His tone was cautiously optimistic, repeatedly saying the year-end objective remains achievable while warning there are no guarantees on government funding.

The CFO did not provide a separate prepared commentary in the transcript, but management cited several financial points: cumulative softwood lumber duty and tariff deposits of USD 49.4 million, equivalent to about CAD 68 million, and lumber-business borrowings plus working capital deficit also totaling $68 million. Shields said the company has had support from existing lenders, including bridge financing and amendments from PenderFund, deferrals and amendments from Fiera, and additional liquidity from the BDC. Management also said it is negotiating how any new credit facilities would be integrated with existing lumber and power plant lender facilities, and may seek amendments to repayment terms and amortization periods.

The main analyst question focused on current BC Interior cash costs and what they could become after capital projects. Shields said that, based on 2027 analyst consensus SPF pricing, the company expects to be EBITDA positive once ramped to 2 shifts, and implied cash costs after lower duties would be fairly close to USD 522. On residuals and chip demand, management acknowledged there could be lower deliveries and prices for interior BC chips if pulp capacity stays constrained, but said Conifex’s power plant gives it a unique outlet because chip production can be burned internally, supporting power-plant EBITDA even if chip sales are weaker.