West Fraser Timber's Q1 2024 sales were $1.627 billion, compared to $1.514 billion in the Q4 2023. Q1 2024 earnings were $35 million, or $0.42 per diluted share, compared to $(153) million, or $(1.87) per diluted share in the Q4 2023. Q1 2024 Adjusted EBITDA was $200 million compared to $97 million in the Q4 2023.
“Our North American OSB, plywood and other engineered products had another strong quarter in Q1 2024, with robust demand driven by strength in new home construction, which carried over from the Q4. This was in contrast to ongoing demand softness in our European EWP business and North American lumber business, particularly for SYP lumber with its greater relative exposure to repair and remodelling applications," said Sean McLaren, West Fraser's President and CEO.
Outlook
West Fraser Timber continues to expect total lumber shipments in 2024 will be largely similar to 2023 levels. The acquisition of Spray Lake lumber mill and reliability and capital improvement gains across its lumber mill portfolio will be largely offset by capacity reductions from the recently announced permanent closures and indefinite curtailments. However, persistently weak market conditions have increased the downside risk to its current shipments guidance, particularly for SYP. That notwithstanding, for now the Company reiterates 2024 SPF shipments guidance of 2.6 to 2.8 billion board feet and SYP shipments of 2.7 to 2.9 billion board feet.
In its NA EWP segment, West Fraser Timber continues to expect 2024 OSB shipments to be consistent with 2023 levels and reiterate shipments guidance of 6.3 to 6.6 billion square feet (3/8-inch basis) this year. Start-up of the Allendale mill continues to progress and we still anticipate a ramp-up period for the mill of up to three years to meet targeted production levels. The Company expects its overall OSB platform to be better and lower cost with a modern Allendale facility operating, and as with all its wood products operations, demand is a key input in determining its operating schedules across its manufacturing footprint. Input costs for the NA EWP business are expected to be relatively stable through 2024.
In its Europe EWP segment, West Fraser Timber expects near-term demand weakness to persist for its panel products, although 2024 shipments of MDF, particleboard and OSB are now expected to be similar or slightly better than 2023 levels. For OSB, West Fraser Timber reiterates shipments guidance in the range of 0.9 to 1.1 billion square feet (3/8-inch basis). Input costs for the Europe EWP business, including energy and resin costs, are expected to stabilize in 2024 but remain elevated.
In Q1 2024, the Company continued to experience moderation of costs and improved availability for inputs across its supply chain, including resins and chemicals, although labour availability and some capital equipment lead times remained challenging. West Fraser Timber expects these trends to largely continue over the near term.
Based on its current outlook, assuming no deterioration from current market demand conditions during the year and no additional lengthening of lead times for projects underway or planned, West Fraser Timber continues to anticipate that will invest approximately $450 million to $550 million in 2024.
West Fraser is a diversified wood products company with more than 60 facilities in Canada, the United States, the United Kingdom, and Europe.
