GreenFirst Reports Financial Results for the First Quarter of 2024
Highlights
-
Q1 2024 net loss from continuing operations was
$13.4 million or$0.08 per share (diluted), compared to net loss of$21.6 million or loss of$0.12 per share (diluted) in Q4 2023. Adjusted EBITDA for Q1 2024 was negative$3.5 million compared to negative$18.0 million in Q4 2023. In Q1 2024, this represents a positive contribution from the Company's lumber operations and a negative contribution from the paper operations and overhead.
-
Average lumber prices for Q1 2024 were higher than Q4 2023, with an average selling price of
$626 /mfbm compared to$601 /mfbm in Q4 2023. There was strong pricing momentum during Q1 2024, however, toward the tail end of the quarter, pricing started to be impacted due to lower housing affordability with increasing mortgage rates. With recent inflation figures coming in higher than expectations, there is growing sentiment that theUS Federal Reserve andBank of Canada may be hesitant to cut interest rates in the very near future.
-
The valuation provision for lumber and log inventory was decreased to
$1.0 million from$4.3 million at the end of Q4 2023, generating a$3.3 million credit to lumber cost of sales in Q1 2024.
-
Our lower duty rate has positively impacted the Company's earnings and free cash flow since
August 1, 2023 . The Company's initial duty deposit rate, totaling 20.23%, remained in effect for almost two years, since the Company's acquisition of its sawmill and paper mill assets onAugust 28, 2021 . This resulted inUS$22 million in higher duties paid compared to its Canadian peers.
-
There continues to be downward pressure on newsprint and paper products prices in
North America . Our paper operations were also impacted by external events in Q1 2024, including two significant power interruptions, that impacted production rate and maintenance related expenditures.
-
Effective
January 1, 2024 , we began operating our lumber and paper segments as decentralized units, withTerry Skiffington engaged as Chief Executive Officer of the paper mill division.
-
We continue to divest non-core properties owned by the Company and are in the process of finalizing a public listing of our
Kenora property. Simultaneously, we remain engaged with the third-party with whom we had a prior letter of intent.
"We initially saw some positive momentum in lumber pricing at the start of the first quarter; however, this positive trend reversed at the end of the quarter resulting in curtailments by some of our competitors in the lumber industry," said
Financial Highlights
The following selected financial information is from the Company’s financial statements and MD&A:
(In thousands of CAD, except per share amounts) |
|
|
|
||||||
For the quarter ended |
|
2024 |
|
|
2023 |
|
|
2023 |
|
Net sales from continuing operations |
|
|
|
||||||
Forest products(2) |
$ |
68,853 |
|
$ |
70,112 |
|
$ |
61,272 |
|
Paper products |
|
24,215 |
|
|
33,060 |
|
|
37,845 |
|
Total net sales from continuing operations |
|
93,068 |
|
|
103,172 |
|
|
99,117 |
|
Operating loss from continuing operations |
|
(7,441 |
) |
|
(22,496 |
) |
|
(19,510 |
) |
Net loss |
|
(13,351 |
) |
|
(21,588 |
) |
|
(18,417 |
) |
Net loss from continuing operations |
|
(13,351 |
) |
|
(21,588 |
) |
|
(20,200 |
) |
Basic loss per share |
|
(0.08 |
) |
|
(0.12 |
) |
|
(0.10 |
) |
Basic loss per share from continuing operations |
|
(0.08 |
) |
|
(0.12 |
) |
|
(0.11 |
) |
Diluted loss per share |
|
(0.08 |
) |
|
(0.12 |
) |
|
(0.10 |
) |
Diluted loss per share from continuing operations |
|
(0.08 |
) |
|
(0.12 |
) |
|
(0.11 |
) |
Adjusted EBITDA from continuing operations(1) |
$ |
(3,468 |
) |
$ |
(17,999 |
) |
$ |
(15,166 |
) |
(In thousands of CAD) |
|
|
||
As at |
|
2024 |
|
2023 |
Total assets |
$ |
302,838 |
$ |
277,944 |
Total liabilities |
|
135,127 |
|
92,706 |
Total shareholders' equity |
$ |
167,711 |
$ |
185,238 |
1Adjusted EBITDA is a Non‐GAAP measure and does not have standardized meaning under GAAP or IFRS. As a result, it may not be comparable to information presented by other companies. For an explanation and reconciliation of Adjusted EBITDA to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the Non-GAAPMeasures section in this MD&A. |
2Includes net sales to external parties only. |
Forest Products (Lumber)
During Q1 2024, the Company saw contribution (net sales less cost of sales) of
Net sales were
Cost of sales were
Paper Products
During Q1 2024, the Company saw contribution (net sales less cost of sales) of negative
Net sales were
Cost of sales were
Other Expenses
The initial duty deposit rate, totaling 20.23%, had remained in effect since the Company's acquisition of its sawmill and paper mill assets and has resulted in a higher payment in relation to our Canadian peers as at
SG&A expenses of
Liquidity and Borrowings
At
Outlook
High interest rates, overall macroeconomic concerns and tensions in
In the longer-term, lack of available housing inventory, record levels of immigration in
Despite continued curtailment of lumber production in the Province of
Reconciliation of Adjusted EBITDA
References to EBITDA in this document are measures of earnings (loss) before interest and finance costs, income taxes, depreciation and amortization, while references to Adjusted EBITDA reflect EBITDA plus other non-operating costs such as impact of valuation changes on the Company's investments, the impact of foreign exchange on the Company’s long-term debt, loss on extinguishment of debt, loss on sale of assets and other non-operating losses. Management believes that certain lenders, investors, and analysts use EBITDA and Adjusted EBITDA as a common valuation measurement and to measure the Company’s ability to service debt and meet other payment obligations. EBITDA and Adjusted EBITDA are not intended to replace net earnings (loss), or other measures of financial performance and liquidity reported in accordance with GAAP. For more information on non-GAAP measures, please see the Company's MD&A.
(In thousands of CAD) |
|
|
|
||||||
For the quarter ended |
|
|
|
||||||
Net loss from continuing operations |
$ |
(13,351 |
) |
$ |
(21,588 |
) |
$ |
(20,200 |
) |
Adjustments: |
|
|
|
||||||
Finance costs, net |
|
1,056 |
|
|
609 |
|
|
896 |
|
Income taxes |
|
4,924 |
|
|
(2,488 |
) |
|
80 |
|
Depreciation and amortization |
|
3,973 |
|
|
4,497 |
|
|
4,344 |
|
EBITDA |
|
(3,398 |
) |
|
(18,970 |
) |
|
(14,880 |
) |
Gain on investment |
|
— |
|
|
— |
|
|
(286 |
) |
Gain on sale of assets |
|
(70 |
) |
|
971 |
|
|
— |
|
Adjusted EBITDA from continuing operations(1) |
$ |
(3,468 |
) |
$ |
(17,999 |
) |
$ |
(15,166 |
) |
1Adjusted EBITDA is a Non‐GAAP measure and does not have standardized meaning under GAAP or IFRS. As a result, it may not be comparable to information presented by other companies. For an explanation and reconciliation of Adjusted EBITDA to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the Non-GAAPMeasures section in the MD&A for the first quarter ended |
Earnings Conference Call
GreenFirst will host a conference call to review the Q1 2024 financial results on
About GreenFirst
Forward Looking Information
Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact are forward-looking statements. Forward looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend”, “estimate” or the negative of these terms and similar expressions. Forward-looking statements are based on certain assumptions and, while GreenFirst considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. In addition, forward-looking statements necessarily involve known and unknown risks, including those set out in GreenFirst’s public disclosure record filed under its profile on www.sedarplus.ca. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. GreenFirst disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
For more information, please visit: www.greenfirst.ca .
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