Western Forest Products Inc. (“Western”) reported net income of $38.6 million and adjusted EBITDA of $66.2 million in the 2Q 2022. Strong Japan lumber demand and record specialty product pricing drove revenue growth, but earnings were reduced by increased stumpage expense, logistics constrained shipments, higher export tax, freight rates and operating costs. In addition, a significant decline in commodity lumber pricing through the quarter and weaker cedar markets led to increased inventory provisions.
Net income in the 2Q 2022 was $38.6 million ($0.12 per diluted share) as compared to net income of $38.0 million ($0.11 per diluted share) for the 1Q 2022, and net income of $78.3 million ($0.21 per diluted share) in the 2Q 2021.
Revenue grew by 6% in the 2Q 2022 as compared to the same period last year.
Western’s second quarter adjusted EBITDA was $66.2 million, as compared to adjusted EBITDA of $65.4 million in the 1Q 2022, and adjusted EBITDA of $120.4 million in the 2Q 2021. Operating income prior to restructuring and other items was $53.4 million, compared to income of $52.2 million in the 1Q 2022, and $105.7 million of income reported in the 2Q 2021.
“We continue to deliver strong results overcoming significant cost pressures and logistics challenges,” said Don Demens, President and CEO. “Recent capital announcements for our coastal manufacturing business and the addition of glulam to our specialty lumber portfolio are important steps forward in Western’s strategy to move up the product value chain and to improve shareholder returns.”
Adjusted EBITDA for the first six months of 2022 was $131.6 million, as compared to $183.4 million for the same period last year. Net income was $76.6 million for the first six months of 2022, as compared to $132.1 million for the same period last year.
Western is an integrated forest products company building a margin-focused log and lumber business to compete successfully in global softwood markets.