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Western Forest Prod (TSE:WEF)
TSX:WEF
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Western Forest Prod
(TSX:WEF)
49Neutral
Western Forest Prod (WEF) vs. S&P 500 (SPY)
Market Cap
C$129.87M
Dividend YieldN/A
Average Volume (3M)302.84K
Price to Earnings (P/E)―
Beta (1Y)0.82
Revenue Growth4.63%
EPS Growth55.62%
CountryCA
Employees2,051
SectorBasic Materials
Sector Strength59
IndustryPaper, Lumber & Forest Products
Share Statistics
EPS (TTM)-0.10
Shares Outstanding316,745,540
10 Day Avg. Volume237,560
30 Day Avg. Volume302,838
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.13
Price to Cash Flow (P/CF)1.40
P/FCF Ratio2.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$0.62Price Target Upside55.00% Upside
Rating ConsensusHold
Number of Analyst Covering3
Western Forest Prod Business Overview & Revenue Model
Company DescriptionWestern Forest Products Inc. (WEF) is a Canadian forestry company headquartered in Vancouver, British Columbia. The company operates in the forestry sector, focusing on sustainable forest management, timber harvesting, and wood product manufacturing. Western Forest Products produces a range of high-quality wood products, including lumber and timber for domestic and international markets, catering to the needs of construction, remodelling, and industrial sectors.
How the Company Makes MoneyWestern Forest Products generates revenue primarily through the sale of its wood products, including lumber and other timber-based products. The company operates several sawmills and manufacturing facilities that process harvested timber into finished goods. Key revenue streams include the domestic and export sales of these products, with significant markets in North America, Asia, and other international regions. Western Forest Products often enters strategic partnerships and long-term supply agreements with distributors and retailers to ensure stable demand and distribution for its wood products. Additionally, the company may benefit from government incentives related to sustainable forestry practices, which can also contribute to its overall earnings.
Western Forest Prod Financial Statement Overview
Summary
Western Forest Prod is currently navigating through financial difficulties with negative profitability and cash flow concerns. While the balance sheet remains relatively strong, the income statement and cash flow statement highlight significant operational and liquidity challenges that the company must address to stabilize its financial health.Income Statement
Western Forest Prod's revenue has experienced significant volatility with a sharp decline from 2022 to 2023, before a modest recovery in 2024. The gross profit margin has improved slightly in 2024, yet net profit margins remain negative due to continued net losses. EBIT and EBITDA margins indicate operating challenges, signaling ongoing financial stress.40
Negative
Balance Sheet
The balance sheet reflects a stable equity position with a debt-to-equity ratio remaining manageable, though slightly increasing. The equity ratio showcases a solid capital structure with a significant portion of assets financed by equity. However, return on equity is negative, highlighting profitability issues.55
Neutral
Cash Flow
Cash flow analysis reveals improvement in operating cash flow from 2023 to 2024, yet free cash flow remains negative. The company struggles with generating sufficient cash to cover capital expenditures and net income, indicating liquidity challenges.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.06B | 1.02B | 1.44B | 1.42B | 964.90M | Gross Profit |
| 90.20M | 50.60M | 254.50M | 399.00M | 171.60M | EBIT |
| -45.40M | -83.40M | 84.30M | 267.10M | 53.90M | EBITDA |
| 13.20M | -35.10M | 137.00M | 317.70M | 107.00M | Net Income Common Stockholders |
| -30.40M | -68.50M | 61.70M | 201.40M | 33.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 7.90M | 2.30M | 15.80M | 130.00M | 2.90M | Total Assets |
| 915.50M | 915.40M | 932.80M | 959.00M | 852.20M | Total Debt |
| 105.00M | 104.60M | 20.60M | 18.30M | 93.70M | Net Debt |
| 97.10M | 102.30M | 4.80M | -111.70M | 90.80M | Total Liabilities |
| 349.20M | 347.50M | 281.10M | 341.80M | 346.60M | Stockholders Equity |
| 558.20M | 565.00M | 647.20M | 612.10M | 504.50M |
| Cash Flow | Free Cash Flow | |||
| -13.30M | -78.20M | -56.80M | 248.50M | 61.70M | Operating Cash Flow |
| 20.10M | -33.80M | -10.30M | 281.60M | 80.40M | Investing Cash Flow |
| 3.00M | -38.60M | -59.90M | 38.70M | -14.50M | Financing Cash Flow |
| -17.50M | 58.90M | -44.00M | -193.20M | -65.10M |
Western Forest Prod Technical Analysis
Negative
0.40
Price Trends
0.43
Negative
0.43
Negative
0.45
Negative
Market Momentum
>-0.01
Positive
42.90
Neutral
13.91
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WEF, the sentiment is Negative. The current price of 0.4 is below the 20-day moving average (MA) of 0.43, below the 50-day MA of 0.43, and below the 200-day MA of 0.45, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 42.90 is Neutral, neither overbought nor oversold. The STOCH value of 13.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WEF.
Western Forest Prod Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.73B | 11.86 | 17.93% | 1.78% | 4.52% | 0.51% | |
68 Neutral | C$307.44M | 13.94 | 6.61% | 6.91% | 24.29% | -27.59% | |
60 Neutral | $976.61M | ― | -1.80% | 5.27% | 1.36% | 59.36% | |
58 Neutral | $1.75B | ― | -18.83% | ― | -3.20% | -107.88% | |
50 Neutral | $737.33M | ― | -18.73% | ― | -8.81% | -13.99% | |
49 Neutral | C$129.87M | ― | -5.41% | ― | 4.63% | 55.62% | |
47 Neutral | $2.36B | -3.00 | -21.73% | 3.58% | 3.97% | -28.71% |
* Basic Materials Sector Average
Performance Comparison
TSE:WEF
Western Forest Prod
0.40
-0.20
-33.33%
TSE:IFP
Interfor
14.04
-4.65
-24.88%
TSE:CAS
Cascades
9.34
0.19
2.02%
TSE:SJ
Stella-Jones
65.81
-12.55
-16.02%
TSE:CFP
Canfor
14.14
-1.39
-8.95%
TSE:ADN
Acadian Timber
16.79
0.55
3.39%
Western Forest Prod Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -4.76% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The call reflects a strong positive sentiment with significantly improved financial performance, successful strategic investments, and operational efficiency gains. However, challenges remain due to increased US tariffs and market uncertainties in Japan and China.Highlights
Significantly Improved Financial Results
The company delivered significantly improved results in the fourth quarter and full year of 2024 compared to the same period in 2023. Fourth quarter adjusted EBITDA was $14.4 million compared to negative $1.2 million in the same period last year.
Operational Efficiency Enhancements
Operational uptime improved to 85% in 2024 from 83% in 2023, contributing to an incremental gross margin in excess of $6 million.
Strategic Investments and Innovations
Completed and commissioned the first continuous dry kiln on the BC coast at Saltair sawmill with 99.2% capacity utilization, and new automated grading equipment at Duke Point, both expecting EBITDA payback in less than two years.
Successful Strategic Partnerships and Asset Sales
Completed the sale of a 34% interest in a new limited partnership with four Vancouver Island First Nations for $35.9 million, and the sale of northern private timberlands for gross proceeds of $69.2 million.
Lowlights
Increase in US Tariffs
US President Donald Trump signed an executive order imposing a 25% tariff on imported goods from Canada, in addition to the current US softwood lumber duties of 14.4% for Western.
Challenges in the Japanese Market
Pricing in Japan remains challenged due to a weaker yen to US dollar exchange rate, with moderate consumption as housing starts and construction activities are low.
China Market Uncertainty
Despite softwood lumber markets performing above expectations, volatility is expected due to potential US tariff threats impacting exports to the US.
Company Guidance
During the fourth quarter 2024 conference call, Western Forest Products provided guidance reflecting strong performance improvements compared to 2023. Key metrics included an adjusted EBITDA of $14.4 million versus a loss of $1.2 million the previous year, highlighting higher lumber shipments and prices. Capital investments like the $13 million continuous dry kiln at Saltair sawmill operated at 99.2% capacity, with expected payback in under two years. Additionally, the company commissioned automated grading equipment at Duke Point, forecasting a payback period of less than two years on a $4.6 million investment. Inventory turnover increased by 5%, while controllable corporate overhead was reduced by $2.4 million. Looking ahead, Western anticipates improved North American cedar demand and pricing, with expectations of a 25% tariff on Canadian imports into the US, emphasizing strategic priorities and maintaining a strong balance sheet.Western Forest Prod Corporate Events
Financial Disclosures
Western Forest Products to Announce Q1 2025 Results
Neutral
Apr 1, 2025
Western Forest Products Inc. announced the release date for its first quarter 2025 financial and operating results, set for May 6, 2025, with an analyst conference call scheduled for May 7, 2025. The call will feature discussions led by key executives, including the CEO, CFO, and Senior VP of Sales, Marketing, and Manufacturing, followed by a Q&A session with analysts. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic direction, potentially impacting its market positioning and investor confidence.
Business Operations and StrategyFinancial Disclosures
Western Forest Products Reports Improved Fiscal 2024 Results
Positive
Feb 13, 2025
Western Forest Products Inc. reported a significant improvement in its financial performance for the fourth quarter and fiscal year 2024 compared to the previous year. The company achieved an adjusted EBITDA of $14.4 million in Q4 2024, in stark contrast to the negative figures from the previous periods. This financial upturn is attributed to better lumber market conditions, a stronger mix of cedar and industrial lumber sales, and favorable exchange rates. The improved results indicate enhanced market positioning and operational efficiency, likely benefiting stakeholders with a more robust financial outlook.
M&A TransactionsBusiness Operations and Strategy
Western Forest Products Sells Vancouver Island Land to Eastwood for $69.2 Million
Positive
Feb 11, 2025
Western Forest Products has sold 14,500 hectares of land on northern Vancouver Island to Eastwood Climate Smart Forestry Fund for $69.2 million. This sale aligns with Western’s strategy to optimize its BC operations by reducing debt and investing in higher value product manufacturing. Eastwood aims to manage the land with a focus on sustainable forestry and climate change mitigation, while building relationships with local stakeholders to ensure positive ecological and economic impacts.
Western Forest Products Ratifies New Six-Year Collective Agreement
Jan 18, 2025
Western Forest Products Inc. has successfully ratified a new six-year collective agreement with United Steelworkers Local 1-1937, covering approximately 1,000 hourly employees. The agreement, which includes structured wage increases and benefit enhancements, is seen as a significant step in addressing the challenges faced by the BC Coastal forest sector. It reflects a collaborative achievement between the company and union, highlighting their commitment to building a stable future amid industry challenges.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.