Q2 2024 Interfor Corp Earnings Call Transcript
Key Points
- Log costs and conversion costs were down in most regions.
- Shipments were ahead of production, indicating efficient inventory management.
- The company generated $48 million of operating cash flows in the quarter.
- Interfor Corp (IFSPF) maintained a stable financial position with a net debt to invested capital leverage ratio of 35%.
- The company expects to collect tax refunds totaling approximately $59 million and further cash proceeds from the sale of coastal BC forest tenures.
- Adjusted EBITDA was negative $17 million, reflecting ongoing weak lumber market conditions.
- Revenue declined by 5% quarter over quarter, driven by a 4% decrease in lumber shipment volume and a 1% drop in the average realized lumber price.
- A net loss of $76 million was realized in the quarter.
- The company announced curtailments of several low-margin mills, impacting approximately 15% of production volume.
- Softwood lumber duties on Canadian producers are set to increase from 8% to close to 14%, adding uncertainty to lumber production from Canada.
Good morning. My name is Ina, and I will be your conference operator today. (Operator Instructions)
Thank you. Mr. Fillinger, you may begin your conference.
Thank you, operator, and thank you, everyone, for joining us this morning. With me on the call as usual, we have Rick Pozzebon, Executive Vice President, Chief Financial Officer; and Bart Bender, our Senior Vice President of Sales and Marketing.
I'll start off by providing a brief recap of the quarter before passing the call off to Rick and Bart. Turning to our Q2 results our adjusted EBITDA was negative $17 million during yet another challenging quarter that was impacted by continued weak pricing.
Log costs and conversion costs were down in most regions and shipments were ahead of production. Our team continued to drive cash from working capital with reductions made in receivables and also in both log and lumber inventories.
We did see additional industry supply reductions made and believe about 5% to 7
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