GreenFirst Reports Financial Results for the First Quarter of 2025

National Post

14-05-2025

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TORONTO — GreenFirst Forest Products Inc. (TSX: GFP) ('GreenFirst' or the 'Company') announced results for the first quarter ended March 29, 2025. The Company's interim financial statements ('Financial Statements') and related Management's Discussion and Analysis ('MD&A') for the first quarter ended March 29, 2025 are available on GreenFirst's website at www.greenfirst.ca and on SEDAR+ at www.sedarplus.ca.
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Q1 2025 net income from continuing operations was $0.9 million or $0.04 earnings per share (diluted), compared to net loss of $26.6 million or $1.39 loss per share (diluted) in Q4 2024. Adjusted EBITDA from continuing operations for Q1 2025 was positive $5.1 million compared to negative $0.9 million in Q4 2024.
Benchmark prices saw increases during the quarter which resulted in an average realized lumber prices of $729/mfbm for Q1 2025 which was higher than the $680/mfbm pricing realized in Q4 2024.
On February 1, 2025, the new U.S. administration issued an executive order imposing new tariffs on imports from Canada, which came into effect on March 4, 2025. These tariffs were subsequently reversed on March 6, 2025. On April 2, 2025, the U.S. administration issued a new executive order imposing a 10% tariff on all imports into the U.S. from all countries, with much higher tariffs applied to certain other goods. However, goods compliant with the USMCA, such as lumber, are exempt from these tariffs. These events contributed to an environment of economic uncertainty during the quarter.
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'We are pleased to report Q1 2025 performance with positive EBITDA and net income from continuing operations, despite economic uncertainty and ongoing potential tariffs on lumber exports to the U.S.
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While sales volumes and production were down due to market conditions and weather-related disruptions in Ontario, strong lumber prices exceeded expectations and supported the company's positive financial results.
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Looking ahead, we remain committed to disciplined capital expenditures and maintaining a strong balance sheet to navigate market volatility and potential headwinds,' said Joel Fournier, CEO of GreenFirst.
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(In thousands of CAD, except per share amounts)
March 29,
December 31,
March 30,
For the quarter ended
2025
2024
2024 (4
)
Net sales from continuing operations (3)
$
71,830
$
69,948
$
72,447
Operating earnings (loss) from continuing operations
1,411
(5,415
)
2,666
Net income (loss)
920
(28,029
)
(13,351
)
Net income (loss) from continuing operations
920
(26,647
)
141
Basic earnings (loss) per share
0.04
(1.47
)
(0.75
)
Basic earnings (loss) per share from continuing operations
0.04
(1.39
)
0.01
Diluted earnings (loss) per share
0.04
(1.47
)
(0.75
)
Diluted earnings (loss) per share from continuing operations
0.04
(1.39
)
0.01
Adjusted EBITDA from continuing operations (1)(2)
$
5,060
$
(913
)
$
6,296
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(In thousands of CAD)
March 29,
December 31,
As at
2025
2024
Total assets
$
243,518
$
220,466
Total liabilities
96,126
74,850
Total shareholders' equity
$
147,392
$
145,616
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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 this MD&A.
2
Non-GAAP Adjusted EBITDA before one-time duties recoveries for the first quarter ended March 29, 2025 was positive $5.1 million compared to positive $6.3 million for the first quarter ended March 30, 2024 and negative $0.9 million for the fourth quarter ended December 31, 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.
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Net sales were $71.8 million in Q1 2025, an increase of approximately 3% compared to Q4 2024. The increase in net sales was primarily driven by higher realized pricing during the quarter, which offset the impact of lower shipments.
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Cost of sales were $62.1 million, a decrease of approximately 9% compared to Q4 2024. The decrease in cost of sales was primarily due to lower shipment volumes during the quarter.
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Other Expenses
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Duties expense of $5.7 million in the first quarter of 2025 were lower than the fourth quarter of 2024 of $6.2 million due to lower shipments. During both quarters the Company was subject to a combined duty rate of 14.4%.
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SG&A expenses were $2.6 million in the first quarter of 2025 compared to $2.8 million in the fourth quarter ended December 31, 2024 which is aligned with the Company's initiative to managing its SG&A.
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Liquidity and Borrowings
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At March 29, 2025, the Company had $2.5 million in cash on hand and $40.3 million, less $8.6 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 $12.0 million remaining under its equipment financing portion of the credit facility. The Company had drawn down $12.0 million under its revolving portion of the credit facility and $13.0 million (net of repayments) under its equipment financing agreement as at March 29, 2025.
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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 keys 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.
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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.
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In the short term, reduced lumber demand and conservative inventory management are creating supply-side pressures. However, continued production curtailments across several regions including British Columbia, Quebec, and other areas of North America could help stabilize or even support lumber prices in the coming months.
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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.
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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.
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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.
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On February 1, 2025, the new U.S. administration issued an executive order imposing new tariffs on imports from Canada, which came into effect on March 4, 2025. These tariffs were subsequently reversed on March 6, 2025. In parallel, on March 1, 2025, the U.S. administration launched a new trade investigation focused on potential anti-dumping measures targeting imported Canadian lumber. This investigation has contributed to an environment of financial uncertainty for Canadian-based lumber manufacturers.
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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.
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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.
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(In thousands of CAD)
For the quarter ended
March 29, 2025
December 31, 2024
March 30, 2024 (3)
Net income (loss) from continuing operations
$
920
$
(26,647
)
$
141
Adjustments:
Finance costs, net
440
1,082
1,056
Income taxes
51
4,072
1,539
Depreciation and amortization
3,649
4,502
3,630
EBITDA
5,060
(16,991
)
6,366
Gain on sale of assets
—
16,078
(70
)
Adjusted EBITDA from continuing operations (1)(2)
$
5,060
$
(913
)
$
6,296
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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 this MD&A.
2
Non-GAAP Adjusted EBITDA before one-time duties recoveries for the first quarter ended March 29, 2025 was positive $5.1 million compared to positive $6.3 million for the first quarter ended March 30, 2024 and negative $0.9 million for the fourth quarter ended December 31, 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.
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Earnings Conference Call
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GreenFirst will host a conference call to review the Q1 2025 financial results on Wednesday, March 14, 2025 at 9:00am (Eastern). The live webcast of the earnings conference call can be accessed via web: http://momentum.adobeconnect.com/greenfirst2025/ 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.
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About GreenFirst
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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.
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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.
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