WEF.TO - Earnings call transcript Q3 2022 | Western Forest Products Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Western Forest Products Third Quarter 2022 Results Conference Call.

During this conference call, Western's representatives may make forward-looking statements within the meaning of applicable securities laws. These statements can be identified by words like anticipate, plan, estimate, will, and other references to future periods.

Although these forward-looking statements reflect management's reasonable beliefs, expectations and assumptions, they are subject to inherent uncertainties and actual results may differ materially. There are many factors that could cause actual outcomes to be different, including those factors described under risks and uncertainties in the company's annual MD&A, which can be accessed on SEDAR and is supplemented by the company's quarterly MD&A.

only as currently which of made. based and to they are only speak the statements on available information Western are Forward-looking date on as obligation undertakes Except law, forward-looking update statements. no by required to Western should listeners statements. exercise upon relying Accordingly, forward-looking in caution turn like meeting over I to to would the now Mr. President and Western Forest of Hofer, Steven Products. CEO sir. ahead go Please

Steven Hofer

Valarie, you, Western everyone. Products' third XXXX morning Forest call. to like Thank I'd good quarter and to welcome conference you

the solid employees diverse a its partners. spent foundation, listening and well workforce. and through our Nations, with commitment It at its profitable and Western. summary and sustainable benefits questions. throughout of this many the on opportunity our Steve our strengths, and on we that section XX first partners. and foundation today is Nontell, as forward talented results. leadership Executive of our have Williams, with Westerns and that before financial a follow President President Officer; safety results XXXX finding yesterday. I issued other I've and call our Stephen honored the to has on path our Chief I'll build company, to communities, many with Vice a I to call to Nations, other Corporate is shareholders, Financial me stakeholders am then and provide Joining comments employees, outlook as and This take First customers, engaging open First the ask days you Glenn quarter We excited Vice our includes years your you of me Western Development. strong clear focus and to introductory some the Steve's through to will review with established including third

value capital and Looking remain the shareholder return opportunity. growing very focused to highest allocating ahead, long-term we on

it over I business, across turn results. to driving financial best-in-class the review our to our We to customers. margin will profit to on will all key service continue our while focus now provide to Steve

Stephen Williams

the as Thanks third year. $XX.X and Steven. quarter reported million in to the weaker in export higher We weaker provisions demand, in period Compared lumber a curtailments quarter of the XXXX markets, tax Adjusted quarter and of and conditions. Review. million Administrative $XX also and of same of related lower the an with impacts lumber balance results XXXX last last logs year, and stumpage export million million EBITDA to the third EBITDA tax the to in costs in lumber due third of freight finalization of sawmill compared to $XX.X an these $XX.X we expenses, recent mix, included inventory revenue. recovery Offsetting were external most by adjusted softwood quarter impacted to prices, million $XX.X operating increase including shipments same incremental market lower production as

During to finalize review, recent softwood the quarter, the rate lumber its X.XX%. tax administrative the most decrease a resulting export Department in of Commerce in

position at Calvert of and Western The acquisition American mass to completed market. the timber during third cash capital We help quarter on third management. North quarter of will the Looking growing XXXX. capitalize the flow building acquisition

We and also dividends share via repurchases. approach to our returning $XX.X to million capital continued with allocation, balanced shareholders

will Western's of previously announced XXXX. the XXXX We projects. will value-added progress be million grow then on continue over our to and $XX investments products rest support completed wood make of and These strategic and capital business,

we between total million. of XXXX, excluding million expenditures For $XX the and acquisition $XX anticipate Calvert, capital

approach into We continue the fourth heading quarter allocation. to support $XXX in balance quarter. remains ended sheet million the to with will available balanced liquidity, well-positioned Our which our capital

operating volumes lumber North hours. declined the onset our with consumption lose in In of seasonality, quarter America as typically fourth harvest fourth daylight winter. slows the quarters, construction Timberlands, in declines as During we

negatively winter limit and pressure The operating harvest operations of put addition, combination costs. further weather upward In hours and impact can curtailments can reduce production. weather-related and

as well-positioned the log We XXX,XXX remain into inventories inventory. log approximately we meters fourth third head Our cubic quarter. of quarter ended with the

continue to my will Steven to market demand. concludes that match We production comments.

Steven Hofer

Thanks Steve.

the Company, reduced our on for the pace quarter capital the demand volatile at in am remain markets I progress value-focused reflect in of results occurs. world, and up the near-term, strategic challenging tighten logistics. financial to we our global The projects continuing and and that log advancing pressure with chain. Our moving To market strategy move quarter Calvert value on to continued important the low-carbon volumes, in play of interest products. conditions In to including glulam rates product completing execution our sales term, values, to lumber acquisition around current and in costs, pleased specialty Longer supply emphasize believe recovery, that end, portfolio the on conditions, adding a have of and the we central banks to need rebalancing with costs a increase lumber improved products role wood until operational headwinds continue and world. product expect an to

We expect construction up mass lumber. call questions. can drive market for we timber With to that housing continue long-term the to demand open in fundamentals will Valerie, and growth

Operator

you. Thank

question the Steuart. from Instructions] will Sean go We [Operator now from lines. Please first questions is telephone ahead. take Our

Sean Steuart

morning. for Good you. question Steven, Thank you.

shift. you -- You're in of strategic take I'm you some seat the thoughts transition to and strategic it? company intend has implement and any Western's you to pace approach for Do been approach thoughts a shift the of gradual a if to wondering how job this have your for this a to on time. and some long give can The the history into direction months couple on

Steven Hofer

the and days for you has and to first Well, just around the thank XX call. onboarding me you Clearly, great on have really been immersion.

XX in range United spent business different with Columbia, here and the So, and internal both external in stakeholders. units of I've engaging the primarily a the last all States visiting British days wide both

our strategy. to immediate no So, changes certainly

Nation the value incremental it up products earn moving remain to priorities opportunities, same chain the partnerships, First or strategic creative margin. Our our is growth advancing whether exploring

our I shared approach balanced focus certainly in internally near-term, capital and As allocation. around margin to our here all continuing costs here the and

Sean Steuart

thanks for deal What has potential shot? the exposure timber. Calvert Okay, as point a been have mass build as that glulam mass Are mass some you to and And others an question that -- timber? product, is excited of on, and to on about entryway versus that jumping off the on into about timber guys that.

Glen Nontell

timber Calvert some as which vertical our sawmills. potential stone obviously, here, believe potential grow next longer small over At with Glen but into we your product some North five we chain, value Calvert, and moving substantially opportunity Western, in mass for products which special diversification introductory provide our the comments timber We're its acquisition, up others is To sort geographical to XX use to mass criteria. Calvert years. opportunity product, see of building opportunities Sean, the as to an other about a sustainable let going offering our is It's meets timber, provide a America, and acquisition. us. capitalize I'll we on our mass grow term integration on excited also in. a jump maybe some providing stepping as it point, also as well an to definitely

million years, looking on focus that's over that be last million whereabouts, XX we volumes near-term may we're XX months. what next create chain, it's the and at think between XX feet. from shareholder XX year go but be, remain long-term. mass here, nice -- board that or then throughout to XX for to And I going last the in Calvert, opportunities growing opportunity the there value we open done those, into did the any products to interested over is our remain to value to I timber It'd in few think the million all

Sean Steuart

it. Okay, I Appreciate thanks for have That's for now. that Glen. all

Steven Hofer

Sean. Thanks

Operator

you. Thank

Paul Our ahead. next question is Go from Quinn.

Paul Quinn

thanks much. Yes, Morning, for guys.

Paul Quinn

Paul. Morning

Paul Quinn

a while -- Western characterized with suppliers, the weak start years? and Where different for and five big strengths and see the equipment, around Western's opportunities next Steven to you've you been they over operations XX you are Let's well. where for

Steven Hofer

and great the spend think Bid U.S. Group, question, knows the years everyone in fortunate That's done I've a with number Paul. Bid on last call has the to what been this I of

a top some when lower look there in the respect with is driving customers. I for on of of operational of additional conversion cost both capital fronts, a current inside to for a footprint, Southeast achieving manufacturing on in number need of range and costs, levels getting Western optimization terms complexes facility. manufacturing -- the building, technology, when higher -- help quartile we to top the uptime, at Certainly, of wide automation

But strength what's tell have can in out of XX days work stood I we people. first So, to to really some me is really the do. the our you

And in I'm very operations that capital deploy. passionate confident leaders company, to level at side one is equation. plan in a the side we the that other of equation. we of is the have capital strong People able of So, on high the are to execute both with that very the committed timberlands, and group our side a very

Paul Quinn

there? additional in going release, the change? not mentioned -- is APD. the purchase that XX in you on then And with your through what's HVLT press Why TFL Okay. following in the What their and investment

Glen Nontell

First I'll from three them transaction. Nations an and for APD. us in it transaction, necessarily the maybe changing always provide tenure structured incremental our that comment, of First Groups the or was focus purchase say was interest one, circumstances What When to got change since take is partnerships. do Nations ownership feedback Yes, potentially option Glen. original more I to these original we the its Paul, The an that with that the doesn't both we the then but winding

for [Indiscernible] to strategic or that's Forestry First the think discussions with particular Nations while option partnership, period in First tenure and And us. Limited the on has partnership. limited for we that key Nations expired the interested acquiring continue ownership that in I on incremental priority a have time

Paul Quinn

right. guys. Thank All had. I all That's

Steven Hofer

Paul. Thanks,

Operator

next from Please question go Thank Patel. Hamir you. Instructions] is [Operator Our ahead.

Hamir Patel

speak XXXX? expected you Good your Steven, key what could some seater of in terms demand Hi. in of partners you hearing to R&R morning. from

Glen Nontell

have and have as we're we trim orders been see think mean if broadly, and most put until the two on customers levels. Steven of decking first sort slower seater steady, a I quarter in. tale I'll bit perspective, think customers time any about weaker. a spring speaking of clears next a don't look more narrows broadly, inventory From year I entered expecting it of lower for that the talk kick markets, a been ahead I wide of Hamir fairly off jump changes a Hey operating season. think, more Steve seasonally of the or are to to and channel building we'll it's I if where where year, been I timbers more seater. typically will It's the

given risks impact their I think are manage most demand. potential a them of talk in XXXX, of that may the that to looking recession

I inventories seeing, near-term. So, what see in seater sort the potentially of And until what's think we're fairly are shift on the the channel a in is they ordering only demand. low needed customers side

Hamir Patel

CapEx helpful. XXXX? on thanks. yet sense Great, That's lastly Glen. we And what in Thanks QX? Any should expect just for

Glen Nontell

that Hamir, one, Yes, I'll take too.

So, our be talking some terms this that full underway. slight CapEx projects maybe range I full capital The to the a working the $XX think Calvert. is because then just for timing year, strategic through year. for reasonable have CapEx. million specific million, is next delays our of the in $XX plans XXXX, the of probably But range we range is might between still for about there And of acquisition year, plus there

this So, -- into around we the growing million sort XXXX coast. strategic about projects, year, of strategic our to as $XX come on in announced of back $XX capital there's had about the million, manufacturing in year around Today, spent position value-added well. $X that's of it million previously capital and half we this

Hamir Patel

Okay. had. all Glen. Thanks. That’s I Thanks

Glen Nontell

Great. Thanks Hamir.

Operator

I There Thank over the would At further registered. are turn to no meeting Mr. to questions Hofer. back time, this you. like

Steven Hofer

great Thanks our call interest for certainly Have joining Well, everyone to your next Valerie. call in thanks a everyone. day company. forward appreciate today. February. our We And in our look we

Operator

participation. we thank you. lines conference The and for disconnect your this ended. now you has at your Please Thank time

Western Forest Products (WFSTF) 4 Nov 222022 Q3 Earnings call transcript