GreenFirst Forest Products (TSE:GFP) reported a difficult fourth quarter and full-year 2025 against a backdrop of weakening lumber prices, higher U.S. duties and tariffs, and operational downtime tied to major capital projects. Management also highlighted progress on safety, product quality, and internal continuous-improvement initiatives, while emphasizing a cautious approach to spending and market expectations for 2026.
Safety and operating highlights
Chief Executive Officer Joel Fournier opened the call by pointing to the company’s safety performance in 2025, saying all mills finished the year with their lowest severity and incident frequency rates in their history. He said the results position GreenFirst “among the best in the industry” on safety.
Production in 2025 was 401 MFBM compared to 414 MFBM in 2024. Fourth-quarter production was 93 million MFBM, down sequentially. Fournier attributed the decline primarily to the installation and ramp-up of a new saw line at Chapleau and to market-driven curtailments at other mills in December. He said the production loss tied to the Chapleau installation was expected and noted that, without the curtailment, production would have been higher in 2025 than in 2024.
Management also reported improvements in grade and quality. Fournier said upper-grade output increased by approximately 15% by year-end 2025 and that the company expects continued benefits into 2026. In addition, he said employee-led continuous-improvement initiatives generated approximately CAD 7 million in EBITDA gains during 2025, excluding capital expenditures.
Chapleau saw line and capital spending plans
GreenFirst’s previously announced CAD 50 million capital investment program remains in place, but the company is proceeding with only selected strategic projects “at this time,” Fournier said. The main focus in 2025 was the new saw line at Chapleau, a new planer mill, and a cogeneration refurbishment.
Commissioning of the Chapleau saw line began in November and December 2025, with ramp-up continuing through the first quarter of 2026. Fournier said current production is about 80% of target while recovery rates are “fully on target.” He added that the new planer mill is performing as expected with improved product quality, and the cogeneration refurbishment has delivered anticipated benefits in drying capacity and energy production.
Fournier also said the saw line project is expected to be completed below budget, supported by CAD 6 million in provincial funding in the form of a grant and loan. Near term, the company plans to focus on completing commissioning of the Chapleau line and will defer additional strategic capital spending for now. He said routine maintenance capital expenditures were about CAD 9 million in 2025 with no issues.
In the question-and-answer session, management said it expects the Chapleau ramp-up to be completed in the second quarter of 2026. Fournier added that the company is seeing better lumber quality through the planer, including trim-loss reduction. On 2026 capital spending, he said strategic CapEx will be kept to the minimum given market uncertainty, with maintenance spending also focused on minimum selected projects. He added the Chapleau project is “almost fully paid out” in 2025 and that the priority for 2026 is getting the line up to speed and converting the investment into operating benefits.
Market conditions, duties, tariffs, and curtailments
Management described 2025 as a challenging year for lumber markets. Fournier said prices were stronger in the first quarter but declined steadily, reaching their lowest point in December. He cited a western benchmark price of $380 per thousand in December, compared with $492 in the first quarter of 2025.
Fournier also pointed to uncertainty tied to geopolitical conditions, housing affordability, and interest rates. While mortgage rates declined in 2025, he said uncertainty remained. For 2026, he said the company remains cautious, anticipating only a modest price increase in the back half of 2026, while expecting a slight seasonal lift in demand in the short term.
The call also focused heavily on trade-related costs. Fournier said the fourth quarter was the first full quarter under a higher combined antidumping and countervailing duty rate of 35.16%. He also noted that in October 2025 the U.S. administration imposed a 10% tariff on lumber under Section 232.
During Q&A, President Michel Lessard said the combined duties and tariff rate of 45.16% is “certainly not sustainable for the forest industry,” adding it is extremely difficult for U.S. customers to absorb the added cost in an environment with broader uncertainty. He said Canada’s Department of International Trade has entered renewal discussions with the U.S. and Mexico regarding CUSMA, and that removal of Section 232 tariffs would be a “significant point of negotiation.” He added Canada has consulted with industry and provinces and is committed to raising the softwood lumber dispute in those discussions.
On production curtailments, Fournier said the company reduced production in December because pricing “was not bringing any contribution,” making it preferable to shut down to reduce cost and inventory exposure. He added the company also took one week of downtime in January and said GreenFirst will continue to evaluate downtime when the market reaches low points.
Financial results: revenues up, adjusted EBITDA negative
Chief Financial Officer Peter Ferrante reported fourth-quarter 2025 revenue of CAD 76.9 million, up from CAD 69.9 million in the fourth quarter of 2024. Lumber sales increased to CAD 70.7 million, while byproducts and other sales were CAD 6.3 million.
Shipment volume was 108 million board feet. Average selling price in the quarter was $654, down from $680 in the prior-year quarter. Ferrante said that while duties and tariffs are paid by GreenFirst and included in combined prices charged to customers, the company did not see selling prices rise in step with further duty increases in the fourth quarter, which he said suggested weaker demand and limited ability to pass through costs.
Ferrante said adjusted EBITDA from continuing operations was negative CAD 21.7 million in the fourth quarter, compared with negative CAD 0.9 million in the prior-year period. He attributed the decline to inventory write-downs, operational downtime, and higher tariffs, while saying underlying core manufacturing performance remained “relatively stable.”
He also described a reclassification related to 2024 financial statements: the company determined certain costs previously capitalized to inventory and later expensed as cost of sales were more appropriately categorized as SG&A in 2024. The impact on the 2024 inventory balance was not material and was not adjusted in the consolidated financial statements, he said. The company recorded a CAD 4.8 million reclassification to reduce cost of sales and increase SG&A in 2024, with no impact on net loss, cash flows, or shareholders’ equity.
In addition, Ferrante said GreenFirst identified indicators of impairment in 2025 tied to continuous weakness in market prices, macroeconomic conditions, and elevated duties and tariffs. The company performed an impairment assessment at the lumber operations cash-generating unit level using a discounted cash flow approach and determined recoverable amount was CAD 9 million below carrying value, resulting in an impairment charge allocated to selected fixed assets. He said key assumptions included lumber prices, volumes, costs, capital expenditures, duties and tariffs, terminal growth, and a post-tax discount rate of 12%, and that sensitivity analysis did not materially change the conclusion.
On inventory provisions, Ferrante said the increase was driven mainly by lower benchmark prices, higher duties and tariffs in the quarter, and higher production costs associated with ramp-up operations. He characterized the inventory provision as non-cash and said that market recovery, the Chapleau ramp-up, and strategic downtime could help reverse net realizable value adjustments in coming quarters.
Liquidity, financing, and byproduct strategy
Ferrante said the company ended 2025 with total available borrowing capacity of about CAD 107 million, including the revolver, equipment term loan, and a CAD 30 million loan under the Softwood Lumber Guarantee Program. He said that loan was finalized in January 2026 in terms of funding. At year-end, GreenFirst had CAD 28.9 million drawn on its revolving credit facility and letters of credit totaling CAD 3.9 million, leaving about CAD 74.4 million of available liquidity.
In response to a question on why the company entered the Softwood Lumber Program, Ferrante said it was done proactively to strengthen the balance sheet and enhance flexibility to navigate challenging market conditions, support mill ramp-ups, and capitalize on opportunities, while maintaining disciplined spending and oversight.
Management also addressed risks and plans related to byproducts and the pulp-and-paper sector. Lessard said Kap Paper is an important partner consuming a significant portion of chips and bark from three of GreenFirst’s four sawmills. He said uncertainty around Kap Paper creates risk, particularly for residual management and logistics, but added GreenFirst has contingency plans. He also said the company is encouraged by efforts to potentially convert the site to an MDF mill, while noting such a project would require government support and take time.
Lessard added that GreenFirst’s exposure is limited by long-term agreements with RYAM and Kap Paper, which allow it to place or redirect the majority of chips. He said the company is working to reduce reliance on pulp and paper by developing alternative uses and higher-value outlets for byproducts, including evaluating a torrefied pellet facility at Chapleau and other opportunities such as biofuels. He said the company has secured funding for feasibility and pre-engineering work and is progressing discussions with partners and potential customers with letters of intent in place, with updates expected in coming quarters.
Looking at market diversification, Fournier said the company is targeting more Canadian sales—particularly home centers—given Ontario’s proximity to major markets such as Toronto and a competitive freight advantage. He said GreenFirst is also monitoring overseas opportunities, including England and Egypt, while evaluating whether shipping into those markets is economically attractive.
About GreenFirst Forest Products (TSE:GFP)
GreenFirst Forest Products Inc is a forest-first business, focused on sustainable forest management and lumber production. GreenFirst is a Canadian managed company with around 7 sawmills and 1 paper mill located across Ontario and Quebec. It serves residential and commercial construction markets as well as the industrial market.
