Interfor Posts Wider Q4 Loss

- The quarter's results were significantly impacted by trade tariffs, with Interfor recording $31.2 million in U.S. countervailing and anti-dumping duties and an additional $4.7 million related to Section 232 tariffs. By the end of 2025, the company had paid a cumulative total of US$663.5 million in these duties. - In response to weak market conditions, lumber production was cut by 159 million board feet from the previous quarter to a total of 753 million board feet. However, shipments exceeded production, which allowed the company to reduce its lumber inventory by 63 million board feet during the quarter. - The average selling price for lumber fell by $19 to $599 per thousand board feet, reflecting weaker benchmark pricing and soft demand tied to a slowdown in residential construction. - To enhance financial flexibility, Interfor completed several financing transactions, including a $143.8 million equity offering in October 2025. The company ended the quarter with a net debt-to-invested-capital ratio of 36.5% and pro forma available liquidity of $481.6 million. - The ongoing U.S.-Canada softwood lumber dispute remains a key geopolitical risk, with Canadian producers arguing that U.S. duties are inconsistent with trade law under the Canada-United States-Mexico Agreement (CUSMA). - Beyond market cyclicality, Canadian producers face structural challenges, particularly in British Columbia, where environmental constraints, wildfires, and pest infestations have reduced the allowable annual timber cut, driving up log prices. - Looking ahead, Interfor is reducing its capital spending projections to between $75 million and $80 million for 2026, focusing primarily on maintenance. The company also plans to sell non-core assets, including forest tenures in British Columbia, to further bolster its balance sheet. - Management expects North American lumber markets to stay volatile, citing the impacts of shifting monetary policy, ongoing trade measures, and geopolitical uncertainty.