West Fraser Timber (NYSE:WFG) reported continued weak operating conditions in the fourth quarter of 2025, but management highlighted sequential improvement in adjusted EBITDA, ongoing portfolio optimization, and a liquidity position it said provides flexibility to manage through the cycle.
Fourth-quarter and full-year results
President and CEO Sean McLaren said the company generated adjusted EBITDA of -$79 million in Q4 2025, improving from -$144 million in Q3 2025. He noted the prior quarter included a $67 million out-of-period duty expense related to the 2023 calendar duty year.
Segment performance and major non-cash charges
Executive Vice President and CFO Chris Virostek provided segment detail, emphasizing that the company reports in U.S. dollars.
- Lumber: Adjusted EBITDA was – $57 million in Q4, compared with – $123 million in Q3. Virostek said the Q4 result was comparable to Q3 if the prior quarter’s $67 million duty expense is excluded. He also said the company recorded $473 million of non-cash restructuring and impairment charges in the lumber segment in Q4, related to a goodwill impairment of the U.S. lumber business and the closure of two sawmills.
- North America EWP: Adjusted EBITDA was – $24 million in Q4 versus – $15 million in Q3. Virostek said the company recorded a $239 million non-cash restructuring and impairment charge tied to the indefinite curtailment of the High Level, Alberta OSB mill.
- Pulp & paper: Adjusted EBITDA was – $1 million in Q4 compared with – $6 million in Q3. Virostek attributed the sequential improvement largely to a major maintenance shutdown in Q3.
- Europe: Adjusted EBITDA was $4 million in Q4 versus $1 million in Q3, which Virostek said reflected a “moderately improved” business environment.
Virostek said the sequential improvement in overall Q4 adjusted EBITDA was supported by reduced SPF log costs, lower southern yellow pine manufacturing costs, lower OSB labor costs, and the absence of the prior quarter’s duty expense, partially offset by lower lumber and North American OSB prices.
Cash flow, balance sheet, and capital deployment
West Fraser reported cash flow from operations of -$172 million in Q4. Virostek said net debt was $131 million at quarter-end, compared with a net cash position of $212 million in the prior quarter. He attributed the change to a normal seasonal working-capital build, $139 million of capital expenditures, and $32 million deployed toward share buybacks and dividends.
Both Virostek and McLaren pointed to more than $1.2 billion of available liquidity at year-end. McLaren said liquidity has trended lower during the extended downcycle, but described the company’s financial position as strong and said it provides flexibility to navigate further economic challenges.
Operational actions, curtailments, and ramp-ups
Management repeatedly pointed to operational and portfolio actions taken over recent years to lower costs. Virostek said the lumber business continued to benefit from portfolio optimization, including shifting output from closed mills to “more modern, larger scale, and lower-cost mills.” He noted that in the U.S. South, Q4 southern yellow pine shipments were 6% lower sequentially, while unit manufacturing costs were also lower.
McLaren said the company has “high-graded” its mill portfolio during the year through closures or curtailments of higher-cost assets, while also completing the ramp-up of the Allendale OSB mill in South Carolina and the completion and commissioning of the Henderson lumber mill in Texas.
He added that since 2022 the company has removed over 1.1 billion board feet of capacity through mill closures and permanent shift reductions, representing a 16% decrease in lumber operating capacity. Over the last four years, McLaren said West Fraser has invested nearly $1 billion of capital into its lumber business to modernize assets, add flexibility, remove costs, implement margin expansion projects, and improve safety.
In North American EWP, McLaren said the company has largely completed the Allendale ramp-up and has announced an indefinite curtailment of the High Level OSB mill in the spring, which he said will remove 860 million square feet of currently uneconomic capacity in an effort to better balance production with customer demand.
Market commentary, M&A posture, and policy uncertainty
During the Q&A, McLaren said West Fraser does not specifically break out margins between SPF and SYP, but noted the “spread start to close” between product pricing as customers adjust demand patterns. On cost improvements, he said trends in the cost structure reflect multi-year work to reduce costs and modernize operations, rather than one-off items.
Asked about M&A in a depressed pricing environment, McLaren said the company is focused on opportunities that make it “stronger at the bottom of the cycle” and emphasized asset quality. He said the balance sheet provides the ability to react to quality opportunities, while adding that stronger assets “are gonna wait for a better time to be available.” Virostek added that the company would consider leverage for an acquisition only with a clear path to deleveraging to metrics that remain manageable through the cycle.
On pricing dynamics, Senior Vice President of Sales and Marketing Matt Tobin said customers have reported it has been “a little bit more difficult to get what they’re looking for at the time they’re looking for it,” which he said has supported pricing as supply shrinks while demand stays relatively steady. Tobin said it was still early to assess spring demand, noting recent freezes in parts of the U.S. and that clearer indicators may emerge as weather improves.
McLaren also addressed potential U.S. policy actions tied to housing affordability, saying the company was “pleased to see the attention” on the issue but that it is difficult to predict timing or impact on demand. Virostek said West Fraser reiterated previously released 2026 guidance, while noting the company would evaluate the impact if U.S. tariffs and other policies evolve and revise its forecast as appropriate.
About West Fraser Timber (NYSE:WFG)
West Fraser Timber Co Ltd. (NYSE: WFG) is a leading North American diversified wood products company headquartered in Vancouver, British Columbia. The company operates a broad portfolio of manufacturing facilities that produce lumber, engineered wood products such as laminated veneer lumber (LVL), oriented strand board (OSB) and plywood, as well as medium density fibreboard (MDF), particleboard, pulp and paper. West Fraser’s integrated production model spans harvesting, milling and finishing, allowing it to serve a wide range of residential, commercial and industrial construction markets.
Founded in 1955 as West Fraser Mills, the company has grown through both organic investment and strategic acquisitions to become one of the largest lumber producers in the world.
