West Fraser Indefinitely Curtails Two Mills After $80 Million Q3 Loss

West Fraser Timber Co. Ltd. (WFG ) reported third-quarter 2026 sales of $1.363 billion and a loss of $80 million on October 28, 2026, and announced it will indefinitely curtail its Huguley oriented strand board mill in Lanett, Alabama and its lumber mill in Leola, Arkansas. All dollar amounts in the company’s third-quarter results and curtailment announcement are expressed in U.S. dollars.

Third-quarter sales compared with $1.434 billion in the second quarter of 2026. The third-quarter loss of $80 million, or $1.03 per diluted share, compared with a loss of $61 million, or $0.78 per diluted share, in the second quarter. Adjusted EBITDA was $38 million, representing 3% of sales, compared with $59 million in the prior quarter. Adjusted EBITDA is a non-GAAP measure the company defines as IFRS earnings with finance income or expense, tax provision or recovery, amortization, equity-based compensation, restructuring and impairment charges, and other income or expense added back.

Indefinite Curtailments at Huguley and Leola

The curtailments are expected to take effect in the fourth quarter of 2026 following orderly wind-downs. West Fraser attributed the decisions to continued weakness in demand for wood products used in new home construction and repair and renovation applications. The actions are expected to reduce the company’s oriented strand board capacity by 500 million square feet on a 3/8-inch basis and its SYP lumber capacity by 225 million board feet, both on an annual basis. The company expects to record an asset impairment loss of between $200 million and $220 million in the fourth quarter of 2026 in connection with the indefinite curtailments.

“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.”

McLaren said that with no near-term visibility on an improvement in demand, the company took the curtailment steps to align supply with customer demand. He said the decision reflected challenging market conditions rather than the dedication and performance of employees at Huguley and Leola, and that the company is committed to supporting affected employees through the transition.

Lumber segment Adjusted EBITDA was $34 million in the third quarter, including a $12 million favourable duties adjustment. The North America Engineered Wood Products segment posted Adjusted EBITDA of negative $4 million, and the Europe Engineered Wood Products segment posted Adjusted EBITDA of $4 million. On an operating basis, the Lumber segment recorded a $17 million operating loss, North America EWP a $67 million operating loss and Europe EWP a $6 million operating loss, while other operating segments earned $3 million and corporate and eliminations were negative $4 million, for a total operating loss of $92 million.

West Fraser issued a $500 million term loan due September 2029, refinancing its existing $300 million term loan due May 2028. The company reported a final AR7 combined duty rate of 20.02%, which it said maintains its lowest duty deposit rate advantage.

Liquidity increased to $1.2 billion at the end of the third quarter, and the company repaid $55 million of operating loans. Cash and short-term investments were $203 million at October 2, 2026, compared with $202 million at December 31, 2025, and its $1 billion credit facility was undrawn as of October 2, 2026.

Capital expenditures were $212 million through the first nine months of 2026. West Fraser 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. No shares were repurchased under the 2026 NCIB from January 1, 2026 to October 2, 2026.

Shipments Guidance, Input Costs and Tariffs

For 2026, West Fraser estimates SPF and SYP shipments at the low end of the previously stated range of 2.4 to 2.7 billion board feet, citing the current operating environment, its 2025 lumber mill closures and tighter management of inventory. The company estimates 2026 North American OSB shipments at the low end of the previously stated range of 5.9 to 6.3 billion square feet on a 3/8-inch basis, citing soft demand and the High Level, Alberta OSB mill curtailment completed in the second quarter of 2026. It reiterated a 2026 Europe OSB shipments target of 1.0 to 1.25 billion square feet on a 3/8-inch basis and said 2026 capital expenditures are expected to remain within the $300 million to $350 million range.

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 U.S. Census Bureau figures cited in the release. The company also cited a median U.S. home age of approximately 45 years.

Resin and wax costs increased by approximately $3 million in the third quarter compared with the second quarter across all of the company’s mills, West Fraser said. The company put the current impact of diesel inflation on SPF and SYP lumber costs at approximately $15 per mfbm since the beginning of the year, said higher diesel costs in its OSB operations have been partially offset by lower pulpwood prices, and said much of the increase in outgoing freight costs has been passed on through customer surcharges.

According to the release, a 10% tariff under Section 232 of the Trade Expansion Act of 1962 on imported softwood timber and lumber into the United States, imposed by a September 29, 2025 proclamation, took effect October 14, 2025. Tariffs of 50% under Section 338 of the Tariff Act of 1930 on certain Canadian products were announced July 20, 2026 and took effect August 22, 2026. On October 23, 2026, the U.S. administration announced modifications to the scope of certain tariffs on Canadian products, effective October 30, 2026; the revised scope includes MDF products no thicker than 5 mm, and the company’s shipments to the United States of MDF products meeting the applicable criteria represented approximately 15% of its total 2026 MDF shipments. West Fraser said its U.S. shipments of softwood lumber and OSB are not affected by the Section 338 tariffs.

West Fraser will hold an analyst conference call on October 29, 2026, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), chaired by McLaren.