West Fraser Announces Third Quarter 2026 Results and Indefinite Curtailments in its OSB and Lumber Portfolios
VANCOUVER, BC, Oct. 28, 2026 /PRNewswire/ -- West Fraser Timber Co. Ltd. ("West Fraser" or the "Company") (TSX andNYSE: WFG) reported today the third quarter results of 2026 ("Q3-26"). The Company today also announced that it will indefinitely curtail its Huguley oriented strand board (OSB) mill in Lanett, Alabama and lumber mill in Leola, Arkansas. All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise.
Third Quarter Highlights
- Sales of $1.363 billion and earnings of $(80) million, or $(1.03) per diluted share
- Adjusted EBITDA1 of $38 million, representing 3% of sales
- Lumber segment Adjusted EBITDA1 of $34 million, including a $12 million favourable duties adjustment
- North America Engineered Wood Products ("NA EWP") segment Adjusted EBITDA1 of $(4) million
- Europe Engineered Wood Products ("Europe EWP") segment Adjusted EBITDA1 of $4 million
- Issued $500M Term Loan due September 2029, refinancing existing $300M Term Loan due May 2028
- Final AR7 Combined Duty Rate of 20.02%, maintaining lowest duty deposit rate advantage
- Increased liquidity position to $1.2B at the end of the third quarter, repaid $55 million of operating loans
- Guiding to lower end of previously released shipments guidance for SPF, SYP, and NA OSB
Indefinite Curtailment of two mills
West Fraser announced today that it will indefinitely curtail its Huguley OSB mill in Lanett, Alabama and lumber mill in Leola, Arkansas. These curtailments are expected to take effect in the fourth quarter following orderly wind-downs.
These decisions are the result of continued weakness in demand for wood products used in new home construction and repair and renovation applications. These actions are expected to reduce West Fraser's OSB capacity by 500 million square feet (3/8-inch) and SYP capacity by 225 million board feet, both on an annual basis.
We expect to record an asset impairment loss between $200 million to $220 million in the fourth quarter of 2026 in connection with these indefinite curtailments.
Commentary
"Over the last quarter, housing affordability continued to be a key constraint for wood products demand, which remains soft," said Sean McLaren, West Fraser's President and CEO. "We were also impacted by higher energy-related input costs. Our teams responded by running mills to demand, reducing inventory and controlling costs.
With no near-term visibility on an improvement in demand, we took further steps today to align our supply with customer demand through the indefinite curtailments of our Huguley OSB mill in Lanett, Alabama and our lumber mill in Leola, Arkansas.
Decisions like this are never easy because of the impact they have on our employees, their families and the communities where we operate. This action reflects the challenging market conditions facing our business and is not a reflection of the dedication and performance of our employees at Huguley and Leola, who have remained focused on operating safely while working diligently to position these mills for success. We are grateful for their hard work and contributions, and we are committed to supporting them through this transition.
We now expect 2026 SPF, SYP and North American OSB shipments to be towards the lower end of our guidance ranges. We also strengthened our financial position by refinancing our term loan into a new $500 million facility maturing in September 2029, ending the quarter with an undrawn revolver and $1.2 billion of available liquidity."
Results Summary
Third quarter sales were $1.363 billion, compared to $1.434 billion in the second quarter of 2026. Third quarter earnings were $(80) million, or $(1.03) per diluted share, compared to earnings of $(61) million, or $(0.78) per diluted share in the second quarter of 2026. Third quarter Adjusted EBITDA was $38 million compared to $59 million in the second quarter of 2026.
Liquidity and Capital Allocation
Cash and short-term investments increased to $203 million at October 2, 2026 from $202 million at December 31, 2025. Our $1 billion credit facility was undrawn as of October 2, 2026.
Capital expenditures were $212 million through the first nine months of 2026.
We paid $75 million in dividends year-to-date in 2026, and in the third quarter declared a $0.32 per share dividend paid in the fourth quarter of 2026.
From January 1, 2026 to October 2, 2026, no shares have been repurchased under the 2026 NCIB.
Outlook
Markets
The most significant uses for our North American lumber, OSB and engineered wood panel products are residential construction, repair and remodelling and industrial applications. Over the medium to longer term, improvements in housing affordability supported by U.S. government policy changes, reductions in inflation and interest rates and the advanced age of the U.S. housing stock (with a median home age of approximately 45 years) are expected to support new home construction and repair and renovation activity that generates lumber, plywood and OSB demand. In addition, growing market penetration of mass timber in industrial and commercial applications is also expected to become a more significant source of demand growth for wood building products in North America.
The seasonally adjusted annualized rate of U.S. housing starts was 1.22 million units in September 2026, with permits issued for 1.40 million units, according to the U.S. Census Bureau. While there are near-term uncertainties for new home construction and repair and renovation spending, owing in large part to weak consumer confidence and the level of mortgage rates and housing affordability, U.S. unemployment remains relatively low. However, U.S. employment growth has shown signs of slowing, while the conflict in the Middle East and the potential inflationary effects of tariff and other government policies may continue to exert upward pressure on inflation and interest rates. Given these developments, demand for our wood building products will continue to be challenged and may decline over the near term should the broader economy and employment slow or the trend in interest and mortgage rates continue to negatively impact consumer sentiment and housing affordability.
We expect industry demand across Europe and the U.K. to remain broadly in line with current levels in the near term, as the market continues to deal with elevated interest rates, inflationary pressures brought on by the conflict in the Middle East and broader economic uncertainty. Over the longer term, we expect demand for our European products to increase as adoption of OSB and timber-frame construction expands and repair and renovation activity remains supported by an aging housing stock. We believe we are well positioned to navigate market conditions and capitalize on the long-term growth opportunities in our European markets.
Operations
Demand for lumber products in 2026 reflects ongoing housing affordability challenges. Given the current operating environment, our 2025 lumber mill closures and tighter management of inventory, we estimate our SPF and SYP shipments to be at the low end of the previously stated range of 2.4 to 2.7 billion board feet for 2026.
In our NA EWP segment, we expect continued soft demand for our OSB products for the remainder of 2026 due to similar issues as faced in the Lumber segment. In light of these factors, as well as the High Level, Alberta OSB mill curtailment we completed in Q2-26, we estimate 2026 North American OSB shipments to be at the low end of the previously stated range of 5.9 to 6.3 billion square feet (3/8-inch basis).
In our Europe EWP segment, we anticipate 2026 demand for our MDF, particleboard, and OSB panel products to remain stable or show modest improvement compared to 2025 levels, while continuing to monitor macroeconomic conditions in the region. As such, we are reiterating 2026 OSB shipments targeted in the range of 1.0 to 1.25 billion square feet (3/8-inch basis).
Global events have contributed to an increase in oilâbased input costs, including fuels, chemicals and waxes. In our NA EWP segment, resin and wax costs are influenced by a range of factors, and while the relationship is not direct, resin and wax costs generally move in a similar direction as crude oil prices. Resin and wax costs increased by approximately $3 million in Q3-26 compared to Q2-26 across all of our mills, reflecting the combined impact of these factors.
In addition, logging and transportation costs across our lumber operations have increased due to higher diesel costs and, particularly in the U.S. South, reduced transportation labour availability. The impact of diesel inflation on SPF and SYP lumber costs is currently equivalent to approximately $15 per mfbm since the beginning of the year. In our OSB operations, higher diesel costs have been partially offset by lower pulpwood prices. On outgoing freight, much of this increase has been passed on via customer surcharges. We are managing our logging operations to mitigate the diesel price impact. In certain areas, we have purposely reduced log procurement in response to higher costs. Ongoing geopolitical uncertainty in the Middle East and broader macroeconomic conditions may continue to affect the duration and magnitude of these impacts.
Based on our current outlook and assuming stable market demand conditions and no further extension of lead times for ongoing or planned projects, capital expenditures for 2026 are expected to remain within the $300 million to $350 million range.1
Refer to the discussion in our 2025 Annual MD&A under "Risks and Uncertainties - Trade Restrictions" under "Risks and Uncertainties" for a detailed discussion of the risks and uncertainties associated with the imposition of tariffs, which may impact our operational guidance and our profitability during 2026.
Tariffs
On September 29, 2025, the U.S.