What's Happening?
Interfor Corporation has announced a return to profitability in the second quarter of 2025, with net earnings of $11.1 million. This marks a significant turnaround from previous quarters of losses. The company achieved this through strong lumber shipments totaling 978 million board feet, which exceeded production by 5% and reduced inventory by 37 million board feet. Interfor's adjusted EBITDA was $17.2 million on sales of $780.5 million. Despite a decrease in average selling price due to currency fluctuations, the company improved its financial position by reducing net debt and completing the sale of Coastal B.C. forest tenures. Interfor also recorded significant duties expenses for Canadian shipments to the U.S., with cumulative duties paid reaching US$621.5 million.
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Why It's Important?
Interfor's return to profitability is crucial for the North American lumber market, which faces ongoing volatility due to economic policy changes, tariffs, and labor shortages. The company's ability to manage inventory and reduce debt positions it well to navigate these challenges. With 60% of its lumber produced and sold in the U.S., Interfor plays a key role in supplying the U.S. market, especially as domestic manufacturing faces constraints. The company's financial health and strategic decisions could influence market dynamics and trade relations between Canada and the U.S.
What's Next?
Interfor anticipates continued market volatility and is preparing for potential impacts from U.S. trade measures, including a Section 232 investigation on lumber imports. The company plans to focus on capital investments, such as the Thomaston, GA sawmill rebuild, to enhance production capabilities. Stakeholders will be watching how Interfor adapts to changing tariffs and trade policies, which could affect future profitability and market share.
