Interfor Corporation

Interfor reported Q2 2026 adjusted EBITDA of $92 million. Management said realized selling prices increased approximately 11% quarter over quarter, production volumes rose by just over 70 million board feet, or 8%, and production cost per unit improved by approximately 1% and was down 6% compared with full-year 2025 levels. Net debt to invested capital improved to 36.7% from 38.3% at the end of Q1, and available liquidity ended at just over $440 million. For the rest of 2026, management expects capital expenditures of approximately $90 million, with the back half mostly maintenance spending; divestiture proceeds are still expected from B.C. Coast forest tenures at $20 million to $25 million and real estate at around $40 million, though timing remains uncertain.

Ian Fillinger described the quarter as strong execution across the business, citing better lumber markets, cost reduction, improved mill productivity, and disciplined inventory management. He said the company remains focused on safe, efficient mill operations, matching production to demand, holding down costs, and preserving balance sheet flexibility. He also highlighted the Thomaston mill as a top-performing asset and said it is around 97% of pro forma production, with full ramp-up expected by year-end.

Mike Mackay emphasized that Q2 adjusted EBITDA of $92 million was a major sequential improvement and one of the best quarterly results in nearly four years. He attributed the gain to stronger realized pricing, higher production, and lower manufacturing costs, noting manufacturing costs are down about $41 per 1,000 board feet, or about 6% versus 2025 levels. He also said net debt declined, liquidity improved to just over $440 million, and 2026 capex should be about $90 million, implying roughly $15 million to $16 million per quarter in the back half and effectively all maintenance spending. He reiterated expected divestiture proceeds of $20 million to $25 million from B.C. Coast forest tenures and around $40 million from U.S. South real estate, while stressing timing uncertainty.

Analysts focused on how much of the $80 million cost program could be captured in 2026, with management saying the run rate is currently strong but the initiative is still a two-year program and should be modeled roughly 50/50 between this year and next. Questions also centered on Thomaston, where management said the mill is about 97% of pro forma production and expected to be fully ramped by year-end, and on transportation constraints, which remain a watch item but have so far been managed through carrier partnerships and more rail usage. Analysts asked about market softness, especially in wider dimensions in the U.S. South; management said order files remain solid, pricing is still strong, and capacity cuts are not expected imminently. On capital allocation, management said future projects are likely to be smaller, higher-return investments, but the company remains cautious until leverage targets improve further.