Acadian Timber Q3 2026 Earnings Results & Report

Acadian Timber EPS Results

• Actual EPS: C$0.23
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 3 of last 5 quarters

Acadian Timber Revenue Results

• Actual Revenue: C$24.02 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Acadian Timber (TSE:ADN) ('Acadian') is one of the largest timberland owners in Eastern Canada and the Northeastern U.S. We own and manage 775,000 acres of freehold timberlands in New Brunswick and approximately 300,000 acres of freehold timberlands in Maine. Acadian also provides timber services relating to 1.3 million acres of Crown licensed timberlands in New Brunswick. Our primary business is the production of softwood and hardwood sawlogs, pulpwood, and biomass by-products, sold to approximately 85 regional customers. Acadian also generates income through other operations, including Real Estate and Environmental Solutions. Acadian's business strategy is to maximize cash flows from its existing timberland assets through sustainable forest management and other land use activities. We aim to grow our business by acquiring additional timberland assets at value and actively manage those assets to drive improved performance.

Acadian Timber Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Third-quarter results improved year over year: Adjusted EBITDA rose to CAD 5 million from CAD 3.5 million, while net income increased to CAD 4.4 million, or CAD 0.23 per share, supported by higher pricing and improved Maine operations.
• Positive Sentiment: Maine operations achieved a significant turnaround. Sales volumes increased 54%, cost of sales per cubic metre declined 39%, and adjusted EBITDA improved to CAD 1.3 million from a CAD 0.5 million loss, with further efficiency improvements planned for 2027.
• Neutral Sentiment: New Brunswick faced weaker demand for softwood pulpwood and elevated customer inventories, causing freehold sales volumes to fall 21% and adjusted EBITDA to decline to CAD 3.9 million from CAD 4.4 million. Management expects delivery conditions and customer inventories to normalize in the fourth quarter.
• Negative Sentiment: The company highlighted ongoing risks from elevated tariffs, fuel costs, cautious customer operating schedules, and the curtailment of a major New Brunswick hardwood pulpwood consumer. Acadian also has CAD 45.3 million of debt maturing in March 2027 that it intends to refinance.
• Positive Sentiment: Management maintained a positive longer-term outlook, citing expected regional demand from biomass conversion, renewable-energy development, forestry-sector investments, and expansions or modernization of roundwood-consuming facilities. Real estate and environmental-solutions businesses are also expected to become more meaningful contributors over time.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the third quarter 2026 analyst conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you would need to press star one one on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Susan Wood, Chief Financial Officer. Please go ahead.

[Susan Wood, CFO at Acadian Timber]

Thank you, operator. Good afternoon, everyone, and welcome to Acadian Timber's third quarter conference call. With me on the call today is Malcolm Cockwell, Acadian's Chair and Interim President and Chief Executive Officer. Before discussing Acadian's results, I will first remind everyone that in discussing our third quarter financial and operating performance, the outlook for the remainder of 2026 and into 2027, and responding to your questions, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. For further information on our known risk factors, I encourage you to review our news release and MD&A, which are available on SEDAR+ and on our website at acadiantimber.com. I will begin by outlining the financial and operational highlights for our third quarter ended September 26, 2026. Then Malcolm will review the performance of our Maine operations and share our outlook for the business.

[Susan Wood, CFO at Acadian Timber]

Results for the third quarter reflect improvements at our internal harvesting operations in Maine and increased pricing for our products, partially offset by lower sales volumes in New Brunswick, where weak softwood pulpwood demand and elevated customer inventories impacted deliveries. Our performance in Maine improved significantly as compared to Q3 2025. Restructuring of our internal harvesting operations that began in Q2 resulted in more efficient and productive operations, and Maine delivered positive adjusted EBITDA for the quarter. For Q3 2026, Acadian generated $5 million of adjusted EBITDA and $4.4 million of net income, compared to $3.5 million of adjusted EBITDA and $2.9 million of net income in the same period last year. On a per-share basis, net income was $0.23, compared to $0.16 in the same quarter last year. Revenue in Q3 2026 was $24 million, compared to $23 million in Q3 2025.

[Susan Wood, CFO at Acadian Timber]

Timber sales were relatively flat as a 17% increase in the weighted-average selling price, driven by stronger end-use markets and higher fuel surcharges, offset 14% lower sales volumes, both excluding biomass. Timber services revenue increased $800,000, reflecting increased activity for neighboring landowners in Maine. Operating costs and expenses increased $200,000 from Q3 2025, as increased cost of sales per cubic meter in New Brunswick, higher land management costs, and higher silviculture spending were partially offset by lower total sales volumes and lower cost of sales per cubic meter in Maine. Net income for the quarter reflected higher operating income, higher non-cash fair value adjustments, and higher gains on the sale of timberlands relative to Q3 2025. These impacts were partially offset by higher income tax expense.

[Susan Wood, CFO at Acadian Timber]

From a segment perspective, New Brunswick freehold sales volumes, excluding biomass, decreased 21% as compared to Q3 2025, primarily reflecting lower softwood sales volumes due to elevated customer roundwood inventories and abundant sawmill residuals in the region, partially offset by higher hardwood sales volumes. The impact of lower sales volumes was largely offset by an increase in the weighted average selling price, excluding biomass, of 19%, driven by stronger softwood lumber markets and higher fuel surcharges. Variable costs per cubic meter were 16% higher due to higher fuel adjustment costs. Total sales were CAD 19.4 million, compared to CAD 20.5 million in Q3 2025, and adjusted EBITDA was CAD 3.9 million compared to CAD 4.4 million. In Maine, freehold sales volumes, excluding biomass, increased 54% as a result of operational improvements within our internal harvesting operations.

[Susan Wood, CFO at Acadian Timber]

The weighted average selling price, excluding biomass, increased 2% in U.S. dollar terms due to a favorable customer mix and higher fuel surcharges, partially offset by a higher proportion of roadside sales as compared to Q3 2025. Cost of sales per cubic meter decreased 39% due to reduced fixed costs and operational efficiencies. Timber services and other activity increased CAD 800,000 and a sale of several non-core land parcels led to a gain on sale of timberlands of CAD 800,000 as compared to no land sales in Q3 2025. Total sales were CAD 4.6 million, compared to CAD 2.5 million in Q3 2025, and adjusted EBITDA was CAD 1.3 million compared to negative CAD 500,000 last year.

[Susan Wood, CFO at Acadian Timber]

Turning to liquidity, the company ended the quarter with net liquidity of CAD 16.4 million, including cash and available credit capacity net of required minimum balances related to long-term debt. A portion of our long-term debt, totaling CAD 45.3 million, is scheduled to mature in March of 2027. It is our intention to refinance the debt prior to the maturity date. With that, I'll now turn the call over to Malcolm.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Thank you, Susan, and good afternoon, everyone. Similar to the last few calls, I will start by spending a few minutes on our business in Maine, where the changes that we made earlier this year are showing in our results. After that, I will share our outlook as we look ahead to the fourth quarter and into 2027, and I will then close by sharing our perspective on several recent announcements about the forestry sector in our region. With respect to our business in Maine, as a reminder, we brought harvesting in-house in early 2025 to address shrinking regional harvesting and trucking capacity, rising costs, and a forest profile better suited to modern cut-to-length equipment. We have previously explained that the concept was good, but the results throughout 2025 were poor.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Beginning in the second quarter of this year, we made significant changes to the scale and structure of these operations. Our focus shifted from maximizing output to lowering the cost of production. Today, the operation is leaner and more efficient. The changes that we made are showing through in our results. As mentioned by Susan, compared to Q3 2025, freehold sales volumes in Maine increased 54%, and at the same time, cost of sales per cubic meter fell 39%. We also increased the amount of timber services activity for neighboring landowners in Maine. Maine generated CAD 1.3 million in EBITDA in Q3 2026, compared to a loss of CAD 500,000 for the same period last year.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

A portion of the improvement is attributable to the build-out of our real estate segment, which contributed CAD 0.6 million more to EBITDA than Q3 2025, but the majority of the improvement is due to the operational improvements to our internal harvesting operations. These results are better, but there is more work to be done. From here, we plan to make further improvements by adding capacity to our existing equipment, developing new markets for certain products, and optimizing block selection to facilitate efficient harvesting operations. As we pursue these opportunities, we expect our business in Maine to continue delivering stronger results in 2026 compared to 2025 and stronger results in 2027 compared to what we have achieved so far this year. Turning to our outlook for our core business.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

While the forestry sector across North America continues facing headwinds, we maintain a generally positive outlook for the remainder of 2026 and heading into 2027. With respect to contractor availability, we expect to retain sufficient capacity in New Brunswick through the remainder of 2026 and into the 2027 winter season, with steady volumes over the coming quarters. In Maine, as I explained a few moments ago, we plan to further improve our production levels and cost structure. With respect to markets, demand and pricing is shaped mainly by regional supply conditions. Softwood pulpwood demand continues being weak in both New Brunswick and Maine, while hardwood pulpwood demand is expected to remain steady in the short term. Demand for softwood and hardwood sawtimber is expected to hold steady in both New Brunswick and Maine.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

In summary, we do not anticipate significant near-term changes to our markets or our pricing over the coming months, and we maintain a positive longer-term outlook as end-use markets improve and customers increase their consumption. With that said, we note two headwinds that are affecting our customers. The first is tariffs and duties, which remain at elevated levels for certain products. Beyond their direct costs, these have added a layer of uncertainty to our customers' end-use markets. We have not yet observed curtailments that are explicitly due to tariffs and duties, and in any case, Acadian's products are not currently subject to tariffs or duties themselves, but we suspect that the associated uncertainty is discouraging full operating schedules at some facilities. The second headwind is fuel costs. Pricing mechanisms in our customer contracts have continued supporting partial recovery of elevated fuel costs in New Brunswick by Acadian.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

In Maine, where our internal harvesting capacity is directly exposed to fuel costs, our recovery is much lower. Again, elevated fuel costs have not directly led to curtailments, but appear to be discouraging operating schedules and therefore demand in our region. A further headwind is the competitiveness of certain segments. During Q3, a major consumer of hardwood pulpwood in New Brunswick curtailed operations without specifying a restart date. The immediate impact on Acadian is expected to be limited as Acadian maintains multiple customers for each product. However, the impact on the broader region and the broader regional supply and demand dynamics may be significant over the coming months. Looking at end-use markets more broadly, most macroeconomic indicators are neutral in the short term and positive over the long term. The consensus forecast for U.S. housing starts remains steady.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Production curtailments elsewhere in North America, both temporary and permanent, should help to support demand and pricing for our customers in New Brunswick and Maine. Taken together, these trends support our view that the Northeastern forestry sector is well-positioned despite these headwinds that I have noted. With respect to the outlook for our newer businesses, our environmental solutions business is progressing. The voluntary carbon credit market remains steady and our next tranche of carbon credits for the Maine project is working through the transition to ACR's updated Improved Forest Management protocol, and we continue to expect registration in the near future. Our real estate business is also advancing. Acadian sold 19 acres of non-core land in Maine at attractive valuations during Q3 2026, generating a significant gain with no impact to our harvesting operations.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

There are several related real estate initiatives underway across the business, which we expect will allow this business to become a more material and non-depleting pillar of our broader operations in time. Finally, I will close with a positive high-level update about recent announcements in our region. Since the inception of Acadian, we have spoken frequently about our confidence in the long-term resilience and prosperity of the Northeastern forestry sector in general and New Brunswick in particular. Over the course of Q3, that conviction was supported by several positive announcements, including, first, the planned conversion of the Belledune Generating Station from coal to biomass to increase regional demand for biomass. Second, an enhanced focus on wind and solar energy developments in the integrated resource plan of New Brunswick Power to facilitate renewable energy development.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Third, combined federal provincial investments of approximately CAD 86 million in the Strategic Innovation Centre in Digital Forestry in New Brunswick to improve efficiency across the forestry sector. And fourth, several announcements related to the expansions or modernization of roundwood consuming facilities in the region, which cumulatively represent significant new demand in the future. While it may be several years before some of these initiatives directly benefit Acadian, they support our positive outlook for the region in which we operate and align with our plan to operate Acadian as a land-based company with core operations focused on sustainable forest management, complemented by other business activities such as environmental solutions and real estate. In closing, on behalf of the board of directors, thank you for your continued support. Susan and I are now available to take your questions. Operator?

[Operator]

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question is going to come from Matthew McKellar with RBC Capital Markets. Your line is now open.

[Matthew McKellar, Analyst at RBC Capital Markets]

Hi, good afternoon. Thanks very much for taking my questions. I think you mentioned you expect to retain sufficient capacity in New Brunswick through the remainder of 2026 and into the 2027 winter season with steady volumes over the coming quarters. Can you provide any additional perspective just around the volume outlook for New Brunswick, in Q4 specifically, given the market conditions that you'd noted as factors in Q3? Thank you.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Yeah. Thanks for the question, Matt. I'll reiterate our perspective on the contractor capacity and that we expect to be able to get the wood cut, but the important part of your question is with respect to getting it delivered to customers. You'll recall in Q2, we had referred to the fact that there were some delivery restrictions, and we expected those to be resolved by the time we were well into Q3, and that didn't quite play out as we had thought. There's a couple of things playing into that. I think part of it is the fact that there was a very productive winter season, followed by a relatively productive spring and summer, and so inventories at some of our customers were able to remain quite full.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Another piece of it is the fact that some of our customers are not running at full tilt and therefore haven't consumed the normal volume they might. A further piece is the speculation on our part that there's a particular sensitivity to working capital, given some of the headwinds that I mentioned earlier. With all of that said, when we look ahead to Q4, we're now feeling that things are in a normalized situation when it comes to customer inventories, their demand, and therefore our ability to deliver the wood that we cut to them in New Brunswick.

[Matthew McKellar, Analyst at RBC Capital Markets]

Really helpful. Thanks for the detail there. Next, I think there is a pretty significant parcel of land for sale downstream of what is going on with a mill in New Brunswick, something like 107,000 acres. Is that land potentially a good fit for the Acadian portfolio? Any perspective on that one? Thank you.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Yeah. Thanks, Matt. I cannot comment to a specific process and our exact intentions with it. I will speak broadly, though, to how we look at growth opportunities and that is we like New Brunswick. We are an established and major landowner in the province and over the years, the prosperity of the operations there speak for themselves. When we look at the growth opportunities in front of us, a place like New Brunswick or generally the Northeast and particularly the Canadian side of the Northeast is going to be high priority for us. With that specific example you referenced, we will see what happens. There has been some recent commentary about the nature of bids that are coming in for that particular asset and I think it is too early for us to really comment on how we see ourselves fitting into it.

[Matthew McKellar, Analyst at RBC Capital Markets]

Great. Thanks for the perspective there. Just last for me to clean things up, you mentioned selling some waterfront building lots in the quarter in Maine. Is there any more of that specifically that trickles into Q4? I recognize you have other real estate initiatives on the go, but any trickle over into Q4 or is that initiative complete as of Q3? Thank you.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Yeah. I think, not speaking about specifically waterfront or non-waterfront because that would get pretty granular for a call like this, but I can generally say that the real estate activities along the same lines will continue into Q4 and I would say we plan that it would continue for a very long time after that, with that piece of the business growing into something that is making a steady yet non-depleting contribution to the overall business. I think the effort that the team is making at our end is taking opportunities and turning them into inventory and then at the same time getting ourselves well-positioned to find the right customers for the right parcel, many of which, as you can imagine, are small pieces of land that have the right buyer in the right spot.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

But that's the focus of that program so that in the future results like what we saw in Q3 become par for the course for us.

[Matthew McKellar, Analyst at RBC Capital Markets]

Makes sense. Thanks very much. I'll pass it back.

[Operator]

Thank you. I am showing no further questions at this time in the queue. I will now turn the call back over to Malcolm for closing remarks.

[Malcolm Cockwell, Chair, Interim President, and CEO at Acadian Timber]

Thank you, operator. I'll just say that on behalf of the board of directors and the management team of Acadian, I'd like to thank all of our shareholders and other stakeholders for their ongoing support. We look forward to you joining us for our fourth quarter of 2026 conference call on February 18, 2027. Thanks.

[Operator]

This concludes today's conference call. Thank you for participating and you may now disconnect.

Participants

Executives

• Susan Wood, CFO
• Malcolm Cockwell, Chair, Interim President, and CEO

Analysts

• Matthew McKellar, Analyst at RBC Capital Markets