During the 2Q 2022, Acadian Timber Corp. generated sales of $16.5 million, compared to $19.4 million in the prior year period. The weighted average selling price, excluding biomass, increased 18% year-over-year, benefiting from strong sawlog prices and improved pulpwood prices driven by strong demand, as well as the partial recovery of rising fuel costs from customers.
Net income for the 2Q totaled $4.5 million, or $0.27 per share, compared to $6.0 million, or $0.36 per share, in the same period of 2021. The variance in net income compared to the prior year period was primarily the result of lower sales volumes and the non-cash unrealized foreign exchange gain on long-term debt recorded in the prior year of $2.3 million. As a result of the application of hedge accounting effective January 1, 2022 these adjustments are now recorded in other comprehensive income.
Adjusted EBITDA was $2.7 million during the 2Q 2022 compared to $3.9 million in the prior year period, reflecting lower operating income. Adjusted EBITDA margin for the quarter was 17% compared to 20% in the prior year period. Free Cash Flow was $1.9. million, being $1.0 million lower than the prior year period.
“Sustained demand across all of our main products resulted in significant improvements in pricing during the quarter,’” commented Adam Sheparski, President and CEO. “In addition, we have worked with our customers over the last quarter and have begun to recover the additional operational costs we have been incurring, which we expect will have a positive impact on the remainder of the year.”
During the first half of 2022, Acadian generated sales of $43.1 million compared to $45.3 million in the prior year period. The weighted average selling price, excluding biomass, increased 11%, however, sales volume, excluding biomass, decreased 6%. Operating costs and expenses of $33.6 million were $1.1 million lower year-over-year. Adjusted EBITDA of $9.7 million was $1.1 million lower compared to the prior year period.
For the six months ended June 25, 2022, net income was $8.7 million, or $0.52 per share, which represents a decrease of $3.1 million compared to the prior year period, primarily the result of the non-cash unrealized foreign exchange gain on long-term debt recorded in the prior year of $3.5 million, compared to $nil in the current year, as a result of the application of hedge accounting noted above.
Acadian Timber Corp. is one of the largest timberland owners in Eastern Canada and the Northeastern U.S. and has a total of approximately 2.4 million acres of land under management.
