Interfor's losses widen in Q2
Interfor Corporation, which describes itself as "one of the largest lumber producers in the world," reports a net loss of $75.8 million in Q2 of 2024. That's on the heels of a $72.9 million loss in Q1 and compared to losses of $14.1 million in Q2 of 2023.
As a result of the downturn, the company is enacting production curtailments at its sawmill in Philomath, Ore. The company shared more news in its Q2 update, including:
- In response to the ongoing market weakness, Interfor plans to temporarily reduce its total lumber production by approximately 280 to 350 million board feet between August and December of 2024, representing 15 to 18 percent of its normal operating stance.
- In Q2 2024, lumber production totaled 1.0 billion board feet, representing a 35 million board foot decrease over the prior quarter.
- Lumber prices continue to reflect an imbalance of lumber supply and demand, with demand continuing to be affected by the elevated interest rate environment and ongoing economic uncertainty. Lumber prices decreased slightly during Q2’24 as reflected in Interfor’s average selling price of $602 per mfbm, down $8 per mfbm versus Q1’24.
The company also announced $6.6 million of discretionary investment, which it says will focus mainly on a multi-year rebuild of its sawmill in Thomaston, Georgia. It also offered an "outlook" on what the days and months ahead may look like for the company. Interfor writes:
North American lumber markets over the near term are expected to remain depressed as the economy continues to adjust to inflationary pressures, elevated interest rates, labor shortages and geo-political uncertainty, and as industry-wide lumber production continues to adjust to match demand. Interfor expects that over the mid-term, lumber markets will continue to benefit from favorable underlying supply and demand fundamentals. Positive demand factors include the advanced age of the U.S. housing stock, a shortage of available housing and various demographic factors ...
If there is a long-term lumber market downturn, the company writes: "Interfor maintains flexibility to significantly reduce capital expenditures and working capital levels, and to proactively adjust its lumber production to match demand."
