VANCOUVER, BC, July 29, 2026 /CNW/ -- West Fraser Timber Co. Ltd. ("West Fraser" or the "Company") (TSX and NYSE: WFG) reported today the second quarter results of 2026 ("Q2-26"). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise.
Second Quarter Highlights
-- Sales of $1.434 billion and earnings of $(61) million, or $(0.78) per
diluted share
-- Adjusted EBITDA1 of $59 million, representing 4% of sales
-- Lumber segment Adjusted EBITDA1 of $41 million, including a $13 million
favourable in-year duties adjustment
-- North America Engineered Wood Products ("NA EWP") segment Adjusted
EBITDA1 of $13 million
-- Europe Engineered Wood Products ("Europe EWP") segment Adjusted
EBITDA1 of $13 million
-- Other Operating Segments Adjusted EBITDA of $(8) million, due largely to
maintenance at our Cariboo pulp facility
-- Continued ramp-up of Henderson, Texas sawmill, with production more than
doubling versus the first quarter of 2026
-- Completed the wind-down of operations at our High Level, Alberta OSB mill
-- Generated $192 million of cash from operations and repaid $148 million of
operating loans
-- Declared a $0.32 per share dividend, payable in the third quarter
-- Released 2025 Sustainability Report
"West Fraser's second quarter results delivered continued progress against our business priorities supported by improved market conditions across most of our segments," said Sean McLaren, West Fraser's President and CEO. "Our new Henderson mill continues to ramp-up, with the mill more than doubling its output in the quarter and now operating at levels equivalent to the mill it replaced. We continue to make productivity and reliability gains in our U.S. Lumber operations. SYP Lumber production year to date in 2026 was similar to 2025, despite closing the Augusta sawmill in Q4-25. In Canada, lumber production in the quarter rose 13% as our Blue Ridge facility returned to normal operating rates. We also completed the wind-down of our High Level, Alberta OSB mill, a strategic decision that focuses our production in our most modern and efficient facilities, while Europe remained a bright spot as market conditions improved relative to last year. We were pleased to see all of our core segments - lumber, NA EWP, and Europe EWP - report positive Adjusted EBITDA(1) ."
"We continue to focus on maintaining a strong balance sheet and being disciplined in controlling costs. This will position us to navigate the current environment and capitalize on an eventual recovery in demand. We remain constructive on the long-term outlook for residential construction, supported by an ongoing housing supply deficit in the U.S."
1. Adjusted EBITDA is a non-GAAP financial measure. Refer
to the "Non-GAAP and Other Specified Financial Measures"
section of this document for more information on this
measure.
Results Summary
Second quarter sales were $1.434 billion, compared to $1.334 billion in the first quarter of 2026. Second quarter earnings were $(61) million, or $(0.78) per diluted share, compared to earnings of $(188) million, or $(2.40) per diluted share in the first quarter of 2026. Second quarter Adjusted EBITDA was $59 million compared to $(66) million in the first quarter of 2026.
Tariffs
On September 29, 2025, the U.S. administration issued a proclamation that imposed a tariff of 10% under Section 232 of the Trade Expansion Act of 1962 on imported softwood timber and lumber into the U.S., effective October 14, 2025. This tariff is in addition to the existing softwood lumber duties applied to U.S. imports of Canadian lumber.
On July 20, 2026, the U.S. administration announced new tariffs of 50% on certain Canadian products imported into the U.S. under Section 338 of the Tariff Act of 1930, effective August 19, 2026. Our shipments to the U.S. of softwood lumber, OSB and MDF (approximately half of our MDF shipments) are not affected by the recently announced tariffs. The impact of the 338 tariffs on our MDF business is not fully determinable at this time due to indirect exposures and the potential impact on downstream supply chains. On a year-to-date basis had Section 338 tariffs been in place, we estimate these tariffs would have applied to approximately 3% of plywood shipments and 20% of LVL shipments made to customers in the U.S. We continue to monitor developments relating to the scope and implementation of these tariffs and any potential impacts on our business.
For additional information, refer to the discussion in our 2025 Annual MD&A under "Risks and Uncertainties -- Trade Restrictions" as supplemented by the discussion in our Q2-2026 MD&A under "Forward-Looking Statements".
Liquidity and Capital Allocation
Cash and short-term investments decreased to $74 million at July 3, 2026 from $202 million at December 31, 2025. We accessed our $1 billion credit facility, with borrowings of $55 million as of July 3, 2026, up from nil at December 31, 2025.
Capital expenditures were $159 million through the first six months of 2026.
We paid $50 million in dividends year-to-date in 2026, and in the second quarter declared a $0.32 per share dividend payable in the third quarter of 2026.
From January 1, 2026 to July 28, 2026, no shares have been repurchased under the 2026 NCIB.
Outlook
Markets
The most significant uses for our North American lumber, OSB and engineered wood panel products are residential construction, repair and remodelling and industrial applications. Over the medium term, improvements in housing affordability supported by U.S. government policy changes and the expected normalization of inflation and interest rates, a large cohort entering the typical home--buying stage, and the advanced age of the U.S. housing stock (with a median home age of approximately 44 years) are expected to support new home construction and repair and renovation activity that generates lumber, plywood and OSB demand. Over the longer term, growing market penetration of mass timber in industrial and commercial applications is also expected to become a more significant source of demand growth for wood building products in North America.
The seasonally adjusted annualized rate of U.S. housing starts was 1.43 million units in June 2026, with permits issued for 1.37 million units, according to the U.S. Census Bureau. While there are near-term uncertainties for new home construction and repair and renovation spending, owing in large part to weak consumer confidence and the level of mortgage rates and housing affordability, unemployment remains relatively low in the U.S. Further, the U.S. central bank has cut its key lending rate a total of 175 bps since September 2024. While recent rate trends are directionally supportive for the broader housing industry, competing forces continue to create uncertainty around the near-term path of interest rates and rates of inflation. U.S. employment growth has shown signs of slowing, while the conflict in the Middle East and the potential inflationary effects of tariff and other government policies may continue to exert upward pressure on inflation and interest rates. Given these developments, demand for our wood building products may continue to be challenged and even decline over the near term should the broader economy and employment slow or the trend in interest and mortgage rates negatively impact consumer sentiment and housing affordability.
We anticipate continued improvement in industry demand across Europe and the U.K. in the near term. In the longer term, we continue to expect demand for our European products to grow as use of OSB as an alternative to plywood and timber framing as an alternative to brick and block construction for new home construction expands. An aging housing stock is also expected to drive sustained repair and renovation spending, which will continue to support demand for our wood building products. That said, ongoing geopolitical developments, including the inflationary effect of the conflict in the Middle East, may adversely impact near-term demand for our EWP products in the region. Despite these risk factors, we are confident that we will be able to navigate demand markets and capitalize on the long-term growth opportunities ahead.
Operations
Demand for lumber products is expected to remain stable in 2026, reflecting ongoing housing affordability challenges. Given the current operating environment, the 2025 sawmill closures, and the positive contributions from ongoing reliability and capital improvement gains across our lumber mill portfolio, including the ramp up of our modernized Henderson mill, we reiterate our SPF and SYP shipment targets of 2.4 to 2.7 billion board feet for 2026.
In our NA EWP segment, we expect somewhat softer demand for our OSB products in 2026. Similar to the Lumber segment, we acknowledge risks to our demand forecasts given the near-term uncertainty from potential trade tariffs and housing affordability challenges. In light of these factors as well as the High Level, Alberta OSB mill curtailment we completed in Q2-26, we are reiterating 2026 North American OSB target shipments of 5.9 to 6.3 billion square feet (3/8-inch basis).
In our Europe EWP segment, we anticipate 2026 demand for our MDF, particleboard, and OSB panel products to remain stable or show modest improvement compared to 2025 levels, while continuing to monitor macroeconomic conditions in the region. As such, we are reiterating 2026 OSB shipments targeted in the range of 1.0 to 1.25 billion square feet (3/8-inch basis).
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