Western Announces Third Quarter 2025 Results

Press Release

November 5 , 2025 – Vancouver, British Columbia – Western Forest Products Inc. (TSX: WEF) (“Western” or the “Company”) reported Adjusted EBITDA of negative $65.9 million in the third quarter of 2025, which included a non-cash export duty expense of $59.5 million related to the determination of final duty rates from the sixth Administrative Review (“AR”). In comparison, the Company reported Adjusted EBITDA of negative $10.7 million in the third quarter of 2024, which included a $1.0 million export duty recovery related to the determination of final duty rates from the fifth AR, and Adjusted EBITDA of $0.5 million in the second quarter of 2025.

Net loss was $61.3 million in the third quarter of 2025, as compared to a net loss of $19.6 million in the third quarter of 2024, and net loss of $17.4 million in the second quarter of 2025.

(millions of Canadian dollars except per share amounts Q3 Q3 Q2 YTD YTD
and where otherwise noted) (1) 2025 2024 2025 2025 2024
Revenue $ 233.0 $ 241.7 $ 289.1 $ 784.6 $ 790.7
Adjusted EBITDA (2) (65.9) (10.7) 0.5 (62.0) (5.5)
Adjusted EBITDA margin (2) (28%) (4%) 0% (8%) (1%)
Operating loss prior to restructuring and other items $ (78.0) $ (24.4) $ (12.3) $ (99.5) $ (46.0)
Net loss (61.3) (19.6) (17.4) (64.9) (33.3)
Loss per share, diluted (5.71) (1.71) (1.62) (6.00) (2.83)
Net debt (2), end of period 11.6 86.4 27.3
Liquidity (2), end of period 234.2 137.3 189.7
Net debt to capitalization (2) 2% 13% 5%

(1) Certain figures may not add due to rounding

(1) Refer to Adjusted EBITDA, Adjusted EBITDA margin, Liquidity and Net debt to capitalization in the Non-GAAP Financial Measures section.

Third Quarter 2025 Financial and Operational Summary

⦁ Lumber production of 107 million board feet (versus 127 million board feet in Q3 2024).

⦁ Lumber shipments of 129 million board feet (versus 138 million board feet in Q3 2024).
⦁ Cedar lumber shipments of 24 million board feet (versus 33 million board feet in Q3 2024).
⦁ Specialty lumber mix of 51% (versus 53% in Q3 2024).
⦁ Average lumber selling price of $1,409 per mfbm (versus $1,378 per mfbm in Q3 2024).
⦁ Average BC log sales price of $160 per m3 (versus $113 per m3 in Q3 2024).

Accelerating the Transition to Higher Value Products

⦁ Site construction is ongoing on two continuous dry kilns.

⦁ Anticipate the first continuous dry kiln will be completed and commissioned in early 2026, while the completion and commissioning of the second continuous dry kiln is anticipated in mid-2026.

Balance Sheet and Cash Flow

⦁ Reduced net debt by $15.7 million compared to the end of the second quarter of 2025 primarily through working capital reductions.

⦁ Net debt to capitalization improved to 2%, compared to 5% at the end of the second quarter of 2025.

⦁ Increased available liquidity by entering into a new USD$30 million letter of credit facility, which is incremental to the Company’s $250 million syndicated credit facility.

⦁ Ended the quarter with liquidity of $234.2 million, compared to $189.7 million of liquidity at the end of the second quarter of 2025.
⦁ Reducing planned 2025 capital expenditure spending to approximately $30 to $35 million, which includes approximately $16 million of planned spending on two continuous dry kilns.

Other Items

⦁ The insurance process related to our Columbia Vista sawmill remains ongoing. Western recorded USD$5.0 million ($6.9 million) in Other income as an initial insurance recovery in the third quarter of 2025. We continue to evaluate future plans for the site as we work with our insurers to determine available insurance proceeds.

⦁ A strike at our La-kwa sa muqw Forestry Limited Partnership (“LFLP”), which commenced in the second quarter of 2025, remains ongoing. LFLP is actively working to resume bargaining and bring an end to the work stoppage.

⦁ Took 30 million board feet in lumber production curtailments in the third quarter of 2025 and plan to take 35 million board feet of lumber production curtailments in the fourth quarter of 2025.

Softwood Lumber Dispute

During the third quarter of 2025, the US Department of Commerce (“DoC”) published the final antidumping duty (“AD”) rate of 20.53% and countervailing duty (“CV”) rate of 14.63% applicable to Western related to the sixth AR. Western recorded a non-cash export tax expense of USD$44.1 million ($59.5 million), plus accrued interest of USD$8.2 million ($11.4 million) in the third quarter of 2025 as a result of the final sixth AR determination.

Incremental US Tariffs

On September 29, 2025, US President Donald Trump signed an executive order imposing a 10% tariff on imported lumber products through Section 232 of the US Trade Expansion Act. The incremental 10% tariff became effective on October 14, 2025.

Market Outlook

North American markets are expected to continue to remain weak, mainly due to high interest rates and low consumer confidence. In addition, elevated US channel lumber inventory levels are further reducing demand at the producer level. The incremental US tariff of 10% has further complicated market dynamics as producers look to pass the tariff onto customers in an already weak demand environment. Markets may start to improve towards the end of the fourth quarter of 2025 or into early 2026 as supply decreases and as distributors start to build inventories ahead of the spring building season. However, in the near- term, distributors and pro-dealers continue to buy on an as-needed basis and the home center business is expected to be slow as consumers manage their way through the uncertain economic environment.

In Japan and China, housing demand continues to trend downwards, but lumber inventories remain low, resulting in near-term stable pricing. The strong pricing in specialty shop and better products into export markets has started to negatively affect demand into the fourth quarter of 2025, which may have the effect of capping further price increases.

Read More

IBF4