West Fraser Timber Co. Ltd. (NYSE:WFG) Q2 2023 Earnings Conference Call July 27, 2023 11:30 AM ET

Company Participants

Chris Virostek - Chief Financial Officer

Ray Ferris - President and Chief Executive Officer

Sean McLaren - Chief Operating Officer

Conference Call Participants

Hamir Patel - CIBC Capital Markets

Sean Steuart - TD Securities

Ketan Mamtora - BMO Capital Markets

Paul Quinn - RBC Capital Markets

Andrew Kuske - Credit Suisse

Operator

Good morning, ladies and gentlemen. Welcome to West Fraser's Second Quarter 2023 Results Conference Call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer session.

During this conference call, West Fraser's representatives will be making certain statements about West Fraser's future financial and operational performance, business outlook and capital plans. These statements may constitute forward-looking information or forward-looking statements within the meaning of Canadian and United States securities laws. Such statements involve certain risks, uncertainties and assumptions, which may cause West Fraser's actual or future results and performance to be materially different from those expressed or implied in these statements. Additional information about these risk factors and assumptions is included both in the accompanying webcast presentation and in our 2022 annual MD&A and Annual Information Form, which can be accessed on West Fraser's website or through SEDAR for Canadian investors and EDGAR for United States Investors. Thank you.

I will hand the call over to Mr. Chris Virostek. You may begin your conference.

Chris Virostek

Thank you, Hilda. Good morning, everyone, and thank you for joining our second quarter 2023 earnings call. I'm Chris Virostek, Chief Financial Officer of West Fraser, and joining me today are Ray Ferris, our President and CEO; and Sean McLaren, our Chief Operating Officer; and other members of the executive team.

I'll begin with a brief overview of West Fraser's Q2 2023 financial results and then pass the call to Ray who will give an update on the business as well as provide a few concluding remarks before we transition the call to Q&A. As a reminder, we report in U.S. dollars and all my references today will be the U.S. dollar amounts, unless otherwise indicated.

West Fraser generated $80 million of adjusted EBITDA in the second quarter, improving from the $58 million of adjusted EBITDA reported in the first quarter. Our North American EWP segment generated $126 million of adjusted EBITDA, up from $31 million in the prior quarter, a period that had included a $15 million inventory write-down. OSB prices that began to rise strongly midway through the quarter drove the majority of the sequential EBITDA improvement. The Lumber segment posted $10 million of adjusted EBITDA this quarter, up from nil the prior quarter, with lumber demand showing signs of improvement as the second quarter came to a close.