Latest news with #ICLTF
Yahoo
15-05-2025
- Business
- Yahoo
GreenFirst Forest Products Inc (ICLTF) Q1 2025 Earnings Call Highlights: Navigating Tariff ...
Release Date: May 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GreenFirst Forest Products Inc (ICLTF) reported a positive EBITDA of $5.1 million and a net income of $920,000 for Q1 2025, marking an improvement from the previous quarter. The company benefited from higher lumber prices, which helped absorb potential tariff risks. GreenFirst Forest Products Inc (ICLTF) maintained a strong balance sheet with excess liquidity of $51.4 million, including both revolving and equipment portions of their credit facility. The company successfully delivered $9.1 million in incremental EBITDA through operational improvements in 2024 and identified approximately $8 million in non-CapEx efficiency gains for 2025. The repair and remodeling market segment remains strong, driven by increased home equity, aging housing stock, and favorable homeowner investment trends. Shipment and production were lower than expected due to tariff uncertainties and winter-related disruptions in Northern Ontario. The potential increase in combined duty rates from 14.4% to 34.45% could impact end consumers and increase housing costs in the US. The lumber market experienced a decline in prices towards the end of Q1 2025, indicating potential volatility. GreenFirst Forest Products Inc (ICLTF) faced reduced demand due to housing affordability challenges caused by elevated mortgage rates. The company had to temporarily pause major capital initiatives to preserve a strong balance sheet in anticipation of potential economic headwinds. Warning! GuruFocus has detected 1 Warning Sign with ICLTF. Q: Can you speak to the high levels of inventory currently being held at the end of the quarter? Are you seeing any demand concerns from buyers due to this potential increase in duty and tariff? A: (Joel Fournier, CEO) Our raw material inventory increased by $23 million from Q4 2024, aligning with our expectations due to seasonal harvesting. Economic uncertainty led to a temporary increase in lumber inventory by $10 million, but we expect a decrease during Q2. Q: Pricing has started to decline towards the back half of the quarter. Can you talk about what you are seeing in demand right now, both on the repair and remodeling side and new residential construction? A: (Joel Fournier, CEO) The average price was $492 per 1,000 US for Q1, currently at $437 per 1,000. US housing starts showed resilience, and the repair and remodeling market remains strong, driven by increased home equity and aging housing stock. Q: How confident are you in executing your $50 million CapEx plan with the current capital allocation and balance sheet strength? A: (Peter Ferrante, CFO) We are taking a prudent approach, focusing on selective initiatives like the new saw line at the holo location. Our balance sheet is strong, with excess liquidity of $51.4 million, allowing us to manage our capital projects effectively. Q: What are the company's thoughts on the recently announced duty increase from 14.4% to 34.45% for Canadian shipments to the US? What will be the impact on the business? A: (Michel Lessard, President) The increased duty rate is concerning, but historically, costs have been passed to end customers, increasing US housing costs. We hope for a resolution before the new tariffs take effect. Q: What is the company's position on the timing for resolution of the US Department of Commerce under Section 232 investigation? A: (Michel Lessard, President) The investigation is expected to be completed by November 2025. We are not paying additional tariffs beyond current duties and hope the report will show Canadian lumber is not a threat to US national security. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
18-03-2025
- Business
- Yahoo
GreenFirst Forest Products Inc (ICLTF) Q4 2024 Earnings Call Highlights: Strategic Adjustments ...
Cash Generated: Approximately $55 million in cash generated during Q4 2024. Cash on Balance Sheet: $27 million in cash at the end of Q4 2024. Net Loss from Continuing Operations: $26.6 million in Q4 2024. Adjusted EBITDA: Negative $900,000 in Q4 2024. Total Revenue: $70 million in Q4 2024. Production Volume: 103 million FBM in Q4 2024. SG&A Costs: $29 per 1,000 FBM in Q4 2024. Cost of Goods Sold Reduction: $15 per 1,000 FBM improvement in 2024. Net Loss for Fiscal Year 2024: $21.6 million. Adjusted EBITDA for Fiscal Year 2024: Positive $15 million. Lumber Sales Increase: $9.3 million increase in 2024. Average Lumber Price: $631 per 1,000 board foot in 2024. Manufacturing Cost Reduction: $150 million reduction in cost of goods sold in 2024. SG&A Savings: $5.8 million reduction in 2024. Cash Used in Operating Activities: $6.2 million in 2024. Working Capital: $64.4 million at the end of 2024. Credit Facility Availability: $31.0 million net undrawn amount at the end of 2024. Warning! GuruFocus has detected 2 Warning Signs with ICLTF. Release Date: March 17, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GreenFirst Forest Products Inc (ICLTF) significantly improved its debt position and strengthened its balance sheet in Q4 2024. The company raised over $25 million through a rights offering and generated approximately $55 million in cash during the quarter. GreenFirst Forest Products Inc (ICLTF) achieved a reduction in the cost of goods sold by $15 per 1,000 FBM and lowered SGNA by $12 per 1,000. The company reported a positive year-over-year EBITDA improvement of $38 million and net income from continuing operations improved by $18 million versus 2023. GreenFirst Forest Products Inc (ICLTF) successfully executed the Cap Paper spin-out, allowing the company to focus on its core business of sawmills. The company ended the fourth quarter with a net loss from continuing operations, adjusted for one-time events. Revenue decreased by 1% quarter over quarter compared to Q3 2024, driven by a 12% increase in the average lumber price. The volume of lumber sold was down 12%, primarily due to weather-related conditions impacting the supply chain in Northern Ontario. GreenFirst Forest Products Inc (ICLTF) incurred losses of $16 million on the sale of non-core assets during the quarter. The company is pausing selected aspects of its $50 million strategic plan due to uncertainty surrounding potential US tariffs. Q: With the recent announcements around tariffs, what does GreenFirst management believe the impact will be on the industry? A: Michel Lessard, President, explained that the Canadian industry has deposited over $7 billion in duties, and the new tariffs could impact cash flow and net income, reducing funds for reinvestment and modernization. The tariffs might also drive less demand due to higher prices, causing market confusion and a wait-and-see approach among buyers. The tight lumber supply chain has led to increased lumber futures prices, which means US customers will bear the tariff costs. The impact on the US economy is uncertain, given the significant housing shortage. Q: Trump has stated that the US does not need lumber from Canada. Can the US lumber industry meet US demand? A: Joel Fournier, CEO, stated that the US currently meets about 71% of its lumber demand, with Canada providing 24%. During the COVID-19 lumber market peak, US production only increased by 3% due to labor and resource constraints. Meeting the demand gap would require building 60 new sawmills, which is a long-term endeavor due to resource and manpower limitations. Q: What will the company do to mitigate the impacts of the recently announced tariff? A: Joel Fournier, CEO, mentioned that GreenFirst has built a solid balance sheet to execute its capital expenditure plan but will pause certain elements to understand the tariff impact better. The company has a strong customer base in Canada and is exploring international markets. They are also working closely with provincial governments and wood associations to support the industry. Q: With the completion of the Cap Paper spin-out, how does this impact the company? A: Joel Fournier, CEO, explained that the spin-out allows GreenFirst to focus on its core sawmill business. The company is now looking to improve recovery and reduce log costs. Cap Paper remains a customer for wood chips, and GreenFirst has expanded its customer base for residues to mitigate risks. Q: How does the announced slowdown of capital expenditures impact your mission to become a top quartile lumber producer in North America? A: Joel Fournier, CEO, stated that the slowdown is temporary and prudent to understand the tariff impact. The goal remains to be a top quartile producer and the largest wood producer in Ontario, focusing on continuous improvements and high-payback projects. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
