GreenFirst Reports Financial Results for the Second Quarter of 2025

Globe and Mail

13 hours ago

GreenFirst Forest Products Inc. (TSX: GFP) ('GreenFirst' or the 'Company') announced results for the second quarter and two quarters ended June 28, 2025. The Company's interim financial statements ("Financial Statements") and related Management's Discussion and Analysis ("MD&A") for the second quarter and two quarters ended June 28, 2025 are available on GreenFirst's website at www.greenfirst.ca and on SEDAR+ at www.sedarplus.ca.
Highlights
Q2 2025 net loss from continuing operations was $9.6 million or $0.42 loss per share (diluted), compared to net income of $0.9 million or $0.04 earnings per share (diluted) in Q1 2025. Adjusted EBITDA from continuing operations for Q2 2025 was negative $5.2 million compared to positive $5.1 million in Q1 2025.
Benchmark lumber prices declined during the quarter, resulting in an average realized lumber price of $712 per thousand board feet (mfbm) in Q2 2025, down from $729/mfbm in Q1 2025.
During Q2 2025, the Company continued collaboration with the Chapleau large log line supplier to ensure the project remains on schedule and within budget. This counter-cyclical investment is supported by anticipated government funding expected in the coming months. The new production line is projected to enhance productivity and reduce unit costs, delivering significant EBITDA benefits starting in 2026 and beyond.
On August 8, 2025, the US DOC's Final Determination of its Sixth Administrative Review with respect to imports of softwood lumber products from Canada for 2023 assessed a duty rate higher than what the Company was assessed in 2023. Based on this final rate, calculated to be 35.19%, the Company will record a non-cash duty expense of approximately US$19 million ($26 million CAD), plus accrued interest, in the third quarter of 2025 related to the increase in ADD and CVD rates. Cash deposits are paid at the most recent final ADD and CVD duty rates. Amounts paid to date remain held in trust by the US DOC.
GreenFirst Reports Q2 Results Amid Market Uncertainty
"Despite market uncertainty, we finished Q2 2025 with higher sales volumes compared to Q1 2025 - approximately 110,000 mfbm versus 90,000 mfbm. We recorded a negative EBITDA of $5.2 million in Q2 2025, primarily due to lower selling prices and higher lumber costs associated with inventory produced in Q1 2025," said Joel Fournier, GreenFirst's Chief Executive Officer. "On a positive note, GreenFirst set a new high during the quarter in terms of production records with volume reaching 115,000 mfbm, the highest in Company history for continuing operations. Looking ahead, we will maintain a prudent approach, preserve a solid balance sheet, and remain focused on the factors we can control - improving operational effectiveness and driving long-term performance.'
Financial Highlights
The following selected financial information is from the Company's financial statements and MD&A:
(In thousands of CAD, except per share amounts)
June 28,
March 29,
June 29,
For the quarter ended
2025
2025
2024 (4
)
Net sales from continuing operations (3)
$
84,538
$
71,830
$
69,650
Operating earnings (loss) from continuing
operations
(8,828
)
1,411
(9,650
)
Net income (loss)
(9,593
)
920
(14,529
)
Net income (loss) from continuing operations
(9,593
)
920
(9,946
)
Basic earnings (loss) per share
(0.42
)
0.04
(0.82
)
Basic earnings (loss) per share from continuing
operations
(0.42
)
0.04
(0.56
)
Diluted earnings (loss) per share
(0.42
)
0.04
(0.82
)
Diluted earnings (loss) per share from continuing
operations
(0.42
)
0.04
(0.56
)
Adjusted EBITDA from continuing operations (1)(2)
$
(5,161
)
$
5,060
$
(6,075
)
(In thousands of CAD)
June 28,
December 31,
As at
2025
2024
Total assets
$
216,080
$
220,466
Total liabilities
77,306
74,850
Total shareholders' equity
$
138,774
$
145,616
1 Adjusted EBITDA is a Non‐GAAP measure and does not have standardized meaning under GAAP or IFRS. As a result, it may not be comparable to information presented by other companies. For an explanation and reconciliation of Adjusted EBITDA to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the Non-GAAP Measures section in the Company's MD&A .
2 Non-GAAP Adjusted EBITDA before one-time duties recoveries for the second quarter and two quarters ended June 28, 2025 was negative $5.2 million and negative $0.1 million respectively, compared to negative $6.1 million and $0.2 million respectively, for the second quarter and two quarters ended June 29, 2024.
3 Includes net sales to external parties.
4 Certain prior period amounts have been restated as a result of a change in presentation of the Company's Financial Statements for continuing and discontinued operations under IFRS. Please refer to Note 4 - Discontinued Operations, in the Company's Financial Statements for further information.
Net sales in Q2 2025 were $84.5 million, representing an approximate 18% increase compared to Q1 2025. This increase was primarily driven by higher shipments during the quarter, partially offset by lower realized prices.
Cost of sales were $80.1 million, an increase of approximately 29% compared to Q1 2025. The increase in cost of sales was primarily due to higher shipment volumes during the quarter.
Other Expenses
Duties expense of $8.3 million in the second quarter of 2025 was higher than the first quarter of 2025 of $5.7 million due to higher shipments. During both quarters the Company was subject to a combined duty rate of 14.4%.
SG&A expenses were $4.6 million in the second quarter of 2025 compared to $2.6 million in the first quarter of 2025, which was primarily due to non-cash compensation expenses in addition to higher non-recurring professional and legal services in the current period.
Liquidity and Borrowings
At June 28, 2025, the Company had $4.4 million in cash on hand and $39.8 million, less $8.1 million for standby letters of credit, of excess availability under its revolving portion of the credit facility. In addition, the Company also had access to $12.7 million remaining under its equipment financing portion of the credit facility. The Company had drawn down $12.5 million under its revolving portion of the credit facility and $12.3 million (net of repayments) under its equipment financing agreement as at June 28, 2025.
Outlook
The economic outlook for the lumber industry reflects a balance of ongoing challenges and emerging opportunities. Macroeconomic concerns are beginning to stabilize, which may support a recovery in lumber demand and pricing. In North America, the housing market is showing signs of recovery after recent volatility. Mortgage rates are expected to ease while price growth moderates in 2025, which should improve affordability for borrowers. This could provide relief to homeowners and support demand in new construction, remodeling, and renovation activity which are all key factors that are expected to continue driving lumber demand. However, it's hard to say for sure how much mortgage rates will go down and it is also possible they will rise due to the current economic uncertainty.
Structural market dynamics are also contributing to longer-term demand fundamentals. A persistent shortage of housing inventory in the U.S., the aging of the existing housing stock, and demographic-driven demand are likely to support the lumber market both in the near and long term.
In the short term, reduced lumber demand and conservative inventory management are creating supply-side pressures. Supply constraints persist, particularly in Western Canada due to wildfire impacts, regulatory harvest limits, and mill curtailments. While these factors mainly affect Western provinces, limited timber availability and transportation challenges also influence the broader Canadian lumber supply chain, including Ontario. These constraints contribute to ongoing tightness in lumber supply which could help stabilize or even support lumber prices in the coming months.
Labour market constraints remain a key challenge for the industry, contributing to higher costs and occasional production disruptions. Inflationary pressures across North America have further increased the cost of critical inputs, placing additional strain on operational efficiency. Staffing challenges and tight wood supply are ongoing risks that could negatively impact production output and margins across the industry.
Despite these pressures, continuous improvements in production and processing techniques are driving gains in efficiency and helping reduce costs. Companies with access to capital to invest in modern, efficient equipment are better positioned to enhance long-term competitiveness.
A growing focus on environmental sustainability is also reshaping the industry landscape. Organizations that prioritize sustainable forest management and environmentally responsible operations are increasingly gaining favor among regulators, consumers, and investors. GreenFirst is aligned with this trend, producing high-quality lumber in a safe and responsible manner. We are committed to protecting our employees and the environment while creating long-term value for our stakeholders. Our renewable building materials sequester carbon and represent a natural solution in the global effort to combat climate change.
Nonetheless, downside risks remain. Should broader economic conditions or employment levels weaken significantly, or if interest rates remain elevated for an extended period without sufficient adjustments in housing prices, affordability could remain strained. This scenario could suppress new home construction and, in turn, reduce near-term demand for lumber products.
Our company, based in Ontario, primarily supplies SPF lumber products to the U.S. market. On a year-to-date basis, SPF lumber prices have rebounded in 2025, with benchmark prices increasing approximately 8-10%. Pricing strength is supported by constrained supply, elevated U.S. rebuilding demand (notably in wildfire-affected areas), and ongoing trade-related duties on Canadian exports.
Similar to most Canadian softwood lumber exporters, our company faces combined anti-dumping and countervailing duties of approximately 34–35 % imposed by the U.S. Department of Commerce. Our SPF products have largely remained exempt from tariffs due to compliance with the United States-Mexico-Canada Agreement (USMCA), except for a two-day period in the first quarter of 2025.
The actual impact of any current or future tariffs remains unknown and cannot be reasonably estimated at this time. Several factors will influence the outcome, including the effective date and duration of any new trade actions, potential changes in the amount, scope, or nature of the tariffs, and the possibility of countermeasures by the Canadian government. Additionally, any mitigating actions available to the Company or the broader industry may affect the overall impact. We continue to monitor developments closely and assess their potential implications for our operations and financial position.
Reconciliation of Adjusted EBITDA
References to EBITDA in this document are measures of earnings (loss) before interest and finance costs, income taxes, depreciation and amortization, while references to Adjusted EBITDA reflect EBITDA plus other non-operating costs such as impact of valuation changes on the Company's investments, loss on sale of assets and other non-operating losses. Management believes that certain lenders, investors, and analysts use EBITDA and Adjusted EBITDA as a common valuation measurement and to measure the Company's ability to service debt and meet other payment obligations. EBITDA and Adjusted EBITDA are not intended to replace net earnings (loss), or other measures of financial performance and liquidity reported in accordance with GAAP. For more information on non-GAAP measures, please see the Company's MD&A.
(In thousands of CAD)
June 28,
March 29,
June 29,
For the quarter ended
2025
2025
2024 (3
)
Net income (loss) from continuing operations
$
(9,593
)
$
920
$
(9,946
)
Adjustments:
Finance costs, net
797
440
1,101
Income taxes
(32
)
51
(321
)
Depreciation and amortization
3,667
3,649
3,575
EBITDA
(5,161
)
5,060
(5,591
)
Gain on sale of assets
—
—
(484
)
Adjusted EBITDA from continuing operations (1)(2)
$
(5,161
)
$
5,060
$
(6,075
)
1 Adjusted EBITDA is a Non‐GAAP measure and does not have standardized meaning under GAAP or IFRS. As a result, it may not be comparable to information presented by other companies. For an explanation and reconciliation of Adjusted EBITDA to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the Non-GAAP Measures section in the Company's MD&A .
2 Non-GAAP Adjusted EBITDA before one-time duties recoveries for the second quarter and two quarters ended June 28, 2025 was negative $5.2 million and negative $0.1 million respectively, compared to negative $6.1 million and $0.2 million respectively, for the second quarter and two quarters ended June 29, 2024.
3 Certain prior period amounts have been restated as a result of a change in presentation of the Company's Financial Statements for continuing and discontinued operations under IFRS. Please refer to Note 4 - Discontinued Operations, in the Company's Financial Statements for further information.
Earnings Conference Call
GreenFirst will host a conference call to review the Q2 2025 financial results on Wednesday, August 13, 2025 at 9:00am (Eastern). The live webcast of the earnings conference call can be accessed via web: http://momentum.adobeconnect.com/greenfirstq2/ and via phone: [phone] or ([phone]. A replay of the webcast and presentation slides will be available on GreenFirst's website following the conference call.
About GreenFirst
GreenFirst Forest Products is a forest-first business, focused on sustainable forest management and lumber production. The Company owns four sawmills located in rich wood baskets proudly operating over six million hectares of FSC® certified public Ontario forest lands (FSC®-C167905). The Company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provide GreenFirst with significant cyclical and secular advantages in building products.
Forward Looking Information
Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact are forward-looking statements. Forward looking statements are often identified by terms such as 'may', 'should', 'anticipate', 'expect', 'potential', 'believe', 'intend', 'estimate' or the negative of these terms and similar expressions. Forward-looking statements are based on certain assumptions and, while GreenFirst considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. In addition, forward-looking statements necessarily involve known and unknown risks, including those set out in GreenFirst's public disclosure record filed under its profile on www.sedarplus.ca. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. GreenFirst disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.