West Fraser Timber Co. Ltd. has released its financial results for the second quarter of 2024, showing robust performance in its North American oriented strand board (OSB), plywood, and other engineered wood products. The company attributed its success to the continued strength in new home construction demand from the previous quarter, despite facing challenges in its North American lumber sector.
“Once again, our North American OSB, plywood, and other engineered wood products demonstrated strong results and the value of our product diversification strategy. Q2-24 benefited from relative strength in new home construction demand that carried over from the prior quarter. Conversely, we continued to experience demand softness in our North American lumber business, particularly for SYP lumber with its greater relative exposure to repair and remodeling applications”, said Sean McLaren, West Fraser’s president and CEO.
West Fraser reported sales of US$1.705 billion for the second quarter, an increase from US$1.627 billion in the first quarter of 2024. Earnings for the quarter were US$105 million, or US$1.20 per diluted share, compared to US$35 million, or US$0.42 per diluted share, in the previous quarter. Adjusted EBITDA also saw a rise, reaching US$272 million, up from US$200 million in Q1-2024.
The company’s cash and short-term investments grew to US$1.004 billion as of June 28, 2024, compared to US$900 million at the end of 2023. Capital expenditures for the second quarter totaled US$102 million.
In terms of shareholder returns, West Fraser paid out US$24 million in dividends, or US$0.30 per share, during the second quarter. Additionally, the company announced an increase in its quarterly dividend to US$0.32 per share, to be paid in the third quarter.
West Fraser renewed its normal course issuer bid (NCIB) on February 27, 2024, allowing the acquisition of up to 3,971,380 common shares for cancellation between March 1, 2024, and February 28, 2025. By July 23, 2024, the company had repurchased 1,379,659 shares under both the prior and current NCIB.
Since acquiring Norbord on February 1, 2021, West Fraser has repurchased and cancelled 42,956,254 shares, accounting for 79% of the shares issued in respect of the Norbord acquisition. These repurchases were carried out through substantial issuer bids in 2021 and 2022, as well as through normal course issuer bids.
