GreenFirst Forest Products Q2 2026 Earnings Report

GreenFirst Forest Products EPS Results

• Actual EPS: C$0.24
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

GreenFirst Forest Products Revenue Results

• Actual Revenue: $96.10 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

GreenFirst Forest Products Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 11, 2026
• Conference Call Time: 9:00AM ET

GreenFirst Forest Products (TSE:GFP) is a forest-first business, focused on sustainable forest management and lumber production. The Company owns four sawmills located in rich wood baskets proudly operating over six million hectares of FSC® certified public Ontario forest lands (FSC®-C167905). The Company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provide GreenFirst with significant cyclical and secular advantages in building products.

GreenFirst Forest Products Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 operating performance improved significantly: Revenue rose to CAD 96.1 million, while operating income reached CAD 7.9 million and EBITDA turned positive at CAD 11.8 million, driven by higher shipments, stronger realized prices, improved grade mix, and lower unit manufacturing costs.
• Negative Sentiment: Duties and tariffs remain a major financial burden. Q2 export duties and tariffs totaled USD 21.1 million, up from USD 12.1 million in Q1, while year-to-date payments reached approximately CAD 33 million; cash declined to CAD 2.8 million despite positive operating cash flow.
• Neutral Sentiment: The Chapleau Large Log Line continues to ramp up and contributed to higher production, but performance remains below full expectations and the project is taking longer than planned. Management expects the line to reach its full financial contribution by year-end.
• Neutral Sentiment: Management remains cautious on lumber pricing because of uncertain demand, elevated mortgage rates, and broader market conditions, although Canadian mill curtailments and potential U.S.-Canada trade progress could support prices and margins.
• Negative Sentiment: CEO Joel Fournier announced he will resign effective October 31, 2026. He said he will support a smooth transition, but the leadership change introduces uncertainty during an ongoing operational and liquidity recovery.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to GreenFirst 2026 second quarter results conference call. Please note that all lines are muted to prevent any background noise. During the conference call, GreenFirst representatives will be making certain statements about future financial and operational performance, business outlook, and capital plans. These statements may contain forward-looking information or forward-looking statements within the meaning of Canadian securities law. Such statements involve certain risks, uncertainties, and assumptions, which may cause GreenFirst's actual or future results and performance to be materially different from those expressed or implied in these statements. Additional information about these risks, factors, and assumptions is included in GreenFirst's MD&A and annual AIF, which can be accessed on the company's website or through SEDAR+. After the speaker's remarks, there will be a question-and-answer session. Please submit your questions through the online portal.

[Operator]

I will now pass over to Joel Fournier to begin the management presentation.

[Joel Fournier, CEO at GreenFirst]

Thank you, Sylvie, and good morning, everyone, and welcome to our second quarter 2026 earnings call. I am Joel Fournier, the Chief Executive Officer of GreenFirst. Today, I am joined by Peter Ferrante, our CFO, and Michel Lessard, our President. I am pleased to announce that during the second quarter, our production and shipment volume increased by over 20% and 40%, respectively. Additionally, our net sales saw a significant increase of approximately 60% as a result of increase in the benchmark lumber price and strong sales volume. This helped us deliver positive operating income and EBITDA during the quarter. Compared to the previous quarter, we ended Q2 generating approximately CAD 96 million in net sales. This performance was primarily driven by our strongest shipment quarter over the past two years of approximately 120 million MFBM. This was combined with a higher realized selling price and an improved grade mix.

[Joel Fournier, CEO at GreenFirst]

During the quarter, our average lumber selling price increased by approximately CAD 60 per thousand MFBM compared to previous quarter Q1. Overall, our mills finished Q2 with stronger production and lower cost compared with Q1 2026. The increased production volume allowed the company to leverage its fixed manufacturing costs, which in turn reduced our cost of sales despite energy and fuel cost headwinds. This resulted in an overall cost and sales reduction of approximately CAD 70 per thousand during the quarter. Despite these positive operational results, our business continued to face significant pressure from duty and tariffs. During Q2 alone, we incurred approximately USD 21 million in duty and tariff, an increase of USD 13 million compared to last year in Q2. We are closely following the ongoing negotiation between the Canadian federal government and the U.S. administration.

[Joel Fournier, CEO at GreenFirst]

During the quarter, we received approximately CAD 3.2 million from a provincial government through the Ontario Sawmill Chip Support Program. We will continue to work closely with both the federal and provincial governments to take advantage of recently announced programs available to our industry to support our strategic initiatives. These measures will help strengthen both our current and future liquidity position. Now I am going to discuss a little bit about the market. Q2 lumber market update. Overall, lumber market condition improved in Q2 compared with Q1, supported primarily by positive development on the supply side. On the demand side, U.S. housing start reached approximately 1.4 million units in June 2026, representing an increase of 3.5% compared with June 2025 and approximately 19% compared with May 2026. In the repair and remodeling segment, we continue to see strong demand from our key home center partner.

[Joel Fournier, CEO at GreenFirst]

During the quarter, we further expanded our business with this segment by adding two additional locations. On the supply side, it is also worth noting that a number of mill curtailment were announced during Q2 across Canada. This capacity reduction, combined with modest improved market condition, provides support for steadily increased lumber price during the quarter. Home affordability remains a challenge with mortgage rates presently at 6.58% in July. The industry will need to continue to see decline in the federal interest rate in order to support stronger demand moving forward. While we are encouraged by the improvement we saw in Q2, we remain cautious about the outlook for lumber pricing in the coming quarters. Market condition remains uncertain, and we will continue to closely monitor both demand and industry capacity as we move through the second half of the year.

[Joel Fournier, CEO at GreenFirst]

I will pass it over to Peter for the financial section. Thank you.

[Peter Ferrante, CFO at GreenFirst]

Good morning, everyone, and thank you for joining our call. Today I will review our second quarter financial performance, liquidity position, and key financial highlights. Revenue for the second quarter totaled CAD 96.1 million, compared to CAD 60.6 million in the first quarter, and CAD 84.5 million in the second quarter of last year. Lumber sales totaled CAD 91 million with by-product revenue of CAD 5.1 million. The sequential increase was primarily driven by higher shipment volumes and stronger realized lumber prices. Average gross selling prices increased to $765 per 1,000 board feet, while average net selling prices increased to $486 per 1,000 board feet after duties and tariffs. Overall, the quarter reflects a significant improvement in both revenue and operating momentum compared to the first quarter. A key feature of the quarter was that cost of sales totaled CAD 62.1 million, essentially unchanged from the first quarter, despite shipments increasing by more than 40%.

[Peter Ferrante, CFO at GreenFirst]

This reflects the benefits of higher production volumes, improved manufacturing efficiency, and better fixed cost absorption. While inventory costs increased in absolute dollars as higher volumes moved through the business, manufacturing costs declined on a per unit basis as production increased and fixed costs were absorbed over a larger production base. The quarter also benefited from the reversal of previously recognized inventory valuation reserves, primarily reflecting the stronger lumber prices, lower manufacturing costs, and improved inventory mix compared to prior periods. In addition, results benefited approximately from CAD 3 million of previously approved Ontario Sawmill Chip Support Program funding recognized during this quarter. Freight costs increased with higher shipping volumes while depreciation remained relatively stable. Export duties and tariffs totaled $21.1 million, compared to $12.1 million in the first quarter, primarily reflecting higher export volumes under elevated duty and tariff rates.

[Peter Ferrante, CFO at GreenFirst]

Selling, general, and administration expense remained well controlled at CAD 4.3 million, consistent with the first quarter. Foreign exchange losses were CAD 600,000, and there were no impairment charges during the quarter. Finance costs increased modestly to CAD 2.4 million, reflecting the additional borrowings completed during the first quarter of the year. Operating income improved to CAD 7.9 million, compared to an operating loss of CAD 19 million in the first quarter. EBITDA from continuing operations turned positive to CAD 11.8 million, compared to a CAD -15.1 million in Q1. Reported EBITDA benefited from the reversal of previously recognized inventory valuation reserves and government support by-products. Importantly, however, the quarter also reflected a meaningful improvement in underlying operating performance, driven by higher production and shipments, stronger realized pricing, and improved manufacturing efficiency. While year-to-date results continue to reflect the challenging first quarter, the second quarter demonstrates meaningful progress across our operations.

[Peter Ferrante, CFO at GreenFirst]

Production increased 22% sequentially to 110 million, 111 million almost, million board feet, while shipments increased 43% to 119 million board feet. Shipments, therefore, exceeded production during the quarter, resulting in a reduction in inventory and helping to reserve the seasonal inventory build experienced in the first quarter. This also provided a positive contribution to working capital during the quarter. Turning to working capital and cash, the company ended the quarter with CAD 2.8 million of cash, compared to CAD 6.5 million at the end of the first quarter. The company also continues to have access to its revolving credit facility and other financing arrangements to support its liquidity requirements. Operating activities generated CAD 2.4 million of cash during the quarter, reflecting the improvement in operating performance. This was partially offset by working capital movements, primarily the settlement of trade payables that had accumulated during the first quarter.

[Peter Ferrante, CFO at GreenFirst]

While operating cash flows returned to positive territory, improving the conversion of earnings into sustainable cash flow remains an important management priority. Investing activities remain modest, with capital expenditures of approximately CAD 900,000, reflecting our continued disciplined approach to capital spending. Financing activities used CAD 5.1 million of cash, primarily reflecting the scheduled repayments of lease obligations and equipment financing, together with repayments on the revolving credit facility. Liquidity management remains a key priority. At the same time, the second quarter demonstrates that improvements in operating performance are beginning to translate into stronger financial results and cash generation. Management remains focused on disciplined working capital management, prudent capital allocation, and improving the conversion of operating performance and through sustainable cash flow. We will also continue to actively manage the impacts of duties and tariffs. Overall, the second quarter represents a good progress from both an operating and financial perspective.

[Peter Ferrante, CFO at GreenFirst]

We increased production and shipments, improving manufacturing efficiency, strengthened our realized pricing, and returned to a positive operating income and EBITDA. While challenges remain, particularly around duties, tariffs, and liquidity, the second quarter provides a strong foundation as we move through the balance of the year. This concludes my remarks, and I will pass it back to Joel.

[Joel Fournier, CEO at GreenFirst]

Thank you, Peter. Looking ahead, GreenFirst will continue to pursue its objective of becoming top quartile operator and the largest producer in Ontario by maximizing the use of its available wood supply. This continues to position the company uniquely from a log supply perspective compared to its competitors. As mentioned in the previous quarter, we continue to make progress with the commissioning of the new Chapleau Large Log Line at our Chapleau Mill. We expect the ramp-up to continue through Q3. While the commissioning process has taken somewhat longer than originally anticipated, we are making steady progress and are now beginning to see the benefit of the investment. This remains one of our key operational priority going forward. Our objective is to continue increasing throughput at the mill, which should help reduce our manufacturing cost while maintaining a strong grade mix to support mill net realization.

[Joel Fournier, CEO at GreenFirst]

Looking ahead, we will also evaluate the reintroduction of smaller strategic capital expenditure that can generate improvement in productivity and operating performance. We will also continue to execute necessary maintenance of business capital expenditures across operation. We remain prudent with cash and discipline in our approach to capital allocation. At the same time, we will evaluate potential larger strategic investment where the economics are compelling, particularly where we may be able to take advantage of recently announced federal government support programs. No decisions have been made at this time regarding larger CapEx project, and we will communicate further development to our shareholder as appropriate. Turning to our wood residual strategy, we continue to work with Texana to explore a potential partnership for the development of a torrefied pellet facility in Chapleau.

[Joel Fournier, CEO at GreenFirst]

We believe there is an opportunity to better utilize sawmill residuals in the region while potentially creating additional value for GreenFirst. The proposed project could support effort to replace coal with lower carbon energy sources for power generation. We are currently progressing through the feasibility stage and expect this work to be completed during Q3. Subject to the results of the feasibility study, required approval, financing, and final investment decision, construction could potentially begin in late 2027. We believe this type of project is well aligned with the federal government's recent commitment to support the Canadian forest product industry and investment and strengthen the long-term competitiveness of the sector. Finally, we continue to closely follow development involving one of our major chip customer, Kap Paper. Kap Paper is currently working with the government and the potential third-party partners on the development of an MDF facility in Kapuskasing.

[Joel Fournier, CEO at GreenFirst]

Should this project receive the necessary approval and proceed, it could create an important new market for wood residual and support Ontario more stable long-term demand for sawmill residuals in Northern Ontario. We are encouraged by the positive results achieved during the second quarter and by the improvement we signed both our operation and the lumber market. However, we remain prudent as we look ahead, given the continued uncertainty around lumber pricing, duties, and broader market conditions. I would like to highlight that we continue to maintain our excellent safety performance during the second quarter. Both of our key safety indicators, recordable rate and severity rate, remain among the best in our sector in relation to our North American peers. This performance reflect the continued commitments of our employees to choosing safety in their day-to-day work and demonstrates the strength of the safety culture across our company.

[Joel Fournier, CEO at GreenFirst]

GreenFirst remain committed to continuous improvement as a core strategy to enhance business performance. At the same time, we will maintain a disciplined approach to cash management and capital allocation to ensure the company remain well-positioned to navigate potential economic headwinds and market uncertainty. I would like to also take this opportunity to announce that I will be formally resigning from my position as CEO of GreenFirst effective October 31st, 2026. I am proud of what we accomplished together during my time at GreenFirst and of the progress the organization has made through a challenging period for our industry. These accomplishments reflect the commitment and dedication of our people, and it has been a privilege to work alongside such a strong team. I would also like to thank the board for the opportunity to lead GreenFirst and their support during my tenure.

[Joel Fournier, CEO at GreenFirst]

I remain confident in GreenFirst People asset long-term potential, and I am committed to supporting a smooth transition and ensuring continuity. I wish the entire GreenFirst team continued success. I would like to thank everyone for joining the call today and with your continuing interest with GreenFirst. We will now answer any questions that have come through.

[Operator]

Thank you, sir. Ladies and gentlemen, if you do have any questions, please enter them on the web using the Q&A tab. One moment for your first question.

[Joel Fournier, CEO at GreenFirst]

Okay, this is Joel. We do have a question around Chapleau. Now that the Chapleau Large Log Line is ramping up, could you provide an update on how volume and product quality are tracking against expectations, and when we will see the line's full financial contribution? I will answer this one. The Chapleau line continued to make progress month after month. Overall, the monthly performance remains short of full format expectation for now. The project is taking a little bit longer than initially expected, but the forecast ramp-up remains in line with comparable projects in the industry. We expect the line to continue ramping up through the remainder of the year and to realize its full financial contribution by year-end. We continue to work actively with the vendor support in order to bring the line to expected level of production.

[Joel Fournier, CEO at GreenFirst]

Our overall manufacturing performance in Q2 versus Q1 was positively impacted by Chapleau line, as productive volume increased by over 35%. Along with that question, people are asking what other improvement or efficiency are you working at the mill? Like I mentioned briefly earlier, we are going to reintroduce small strategic capital expenditure that will help to push throughput in our mill to further reduce our costs. Such project could be speed control system on actual saw line, and those paybacks are generally quick. Those projects are generally quick payback. Okay, we do have another question here. As a result of the recent regional forest fire in Northern Ontario, do you foresee any issue with short-term or long-term fiber basket availability and quality for the company? I will let Michel, our President, to answer the question.

[Michel Lessard, President at GreenFirst]

Thanks, Joel. We are not impacted by the recent forest fires in Ontario. The most significant fire that we got occurred in the northwestern on the province, while our operations are located in the northeastern. As a result, we did not experience any material disruptions to our operations, fiber supply, or production. Now, as it relates to our long-term fiber basket, availability is currently not a limiting factor for GreenFirst. We have sufficient government-allocated fiber and harvesting capacity to support the continued production growth well beyond our current operating level.

[Joel Fournier, CEO at GreenFirst]

Okay, we do have another question here. The U.S. Department of Commerce recently announced that the preliminary duty rates are expected to drop. Are you expecting that lumber price to fall dollar for dollar, or is there an opportunity for producers to capture margin? I will let Michel, our President, to answer the question.

[Michel Lessard, President at GreenFirst]

Thanks, Joel, again. We will not necessarily expect lumber prices to move dollars for dollars with any reduction in duties. Pricing will continue to be driven primarily by market fundamentals, including supply and demand. If duties are reduced, we believe that there is an opportunity for producers to capture at least part of the benefits to improve margins, although the ultimate outcomes will depend also on the market conditions. Just to note also, as we saw in 2025, when the duties rate increased, we did not see a corresponding increase in selling prices. Market conditions continued to be the main factor.

[Joel Fournier, CEO at GreenFirst]

Okay, we do have another question here. Congratulations. I see you delivered positive results in Q2. What was the main driver for those results, and do you think it could be repeatable? I will answer this one. As mentioned in our discussion, Q2 benefited from a stronger sales volume combined with solid operational performance. Both higher shipment volume and lower manufacturing costs contributed to the results, and our sales and logistics team did an excellent job moving this volume during the quarter. Operationally, two of our mills achieved their lowest processing costs in recent years, despite the headwind from higher energy costs. The mill of Hearst also achieved a Q2 production record while continued progress on the Chapleau line contributed to further cost improvement. Overall, our total cost improved by approximately CAD 70 per 1,000 MFBM produced.

[Joel Fournier, CEO at GreenFirst]

In terms of repeatability, market condition and sales volume can vary from quarter to quarter, so we remain prudent in our outlook. What we can control is our operational execution, and we will continue to focus on improving productivity, leveraging manufacturing cost structure, and maximizing the performance of our assets. Okay, we do have another question. To what extent are the recent energy price increase impacting the company cost structure? I will answer this one. Energy prices impacted us at multiple level, including fuel surcharge associated with harvesting and hauling costs at our mill. Mill consumable and mobile equipment operating costs are impacted. However, it is not a material component of our manufacturing unit cost. As such, the company was able to reduce overall manufacturing costs in Q2 by approximately CAD 70 per 1,000 compared with Q1.

[Joel Fournier, CEO at GreenFirst]

This demonstrates the progress we continue to make on operational efficiency and cost reduction across our operation. Okay, we do have another question here. Can you give us some insights into the reversal of the inventory provision taken this quarter? What is driving the significant decrease this quarter specifically? I will let Peter Ferrante, our CFO, to answer the question.

[Peter Ferrante, CFO at GreenFirst]

At the end of the first quarter, a portion of our inventory was carried at net realizable value because market prices had declined below our internal manufacturing costs. As we mentioned earlier and discussed in our MD&A disclosure, realized lumber prices increased approximately CAD 80-CAD 100 per thousand board feet during the quarter, which was the primary driver of the reversal. We also benefited from lower manufacturing costs as on a per unit basis, our production volumes increased, helping reduce our fixed cost absorption. In addition, our shipment volumes exceeded production during the quarter, reducing our inventory levels while the inventory we produced had a higher value product mix than the first quarter. In summary, when we put this all together, stronger lumber prices were the single largest driver. The reversal also reflected improved manufacturing costs, lower inventory levels, and a higher value inventory mix.

[Peter Ferrante, CFO at GreenFirst]

Moving forward and as future reversals or write-downs, they will all depend on the same factors, which are lumber prices, manufacturing costs, and the composition of our inventory at any specific month end.

[Joel Fournier, CEO at GreenFirst]

Okay, we do have another question here. Could you share the company's perspective on the recent U.S.-Canada trade negotiation? I will let Michel, our President, to answer the question.

[Michel Lessard, President at GreenFirst]

Thanks, Joel. I will say at the beginning that we are certainly encouraged to see that the governments of Canada and the government of U.S. also have re-engaged in discussion aimed at resolving the broader bilateral trade issues, including the softwood lumber. It is still early in the process, and we do not want to speculate on the outcome, but we believe that the constructive dialogue is a positive development for the industry. Our understanding also is that the initial focus is on establishing a broader trade framework before addressing the long-term resolution on the softwood lumber dispute. GreenFirst, through the Canadian Lumber Trade Alliance and the provincial industry associations, continues to monitor developments closely and remains also engaged through the appropriate industry channels. I would add also that on a year-to-date basis, GreenFirst has paid CAD 33 million consisting of CAD 26 million of duties and CAD 7 million in tariffs.

[Michel Lessard, President at GreenFirst]

As such, any future reduction in duties or broader trade agreement would obviously be a positive outcome for both GreenFirst but also for the Canadian forest products industry.

[Joel Fournier, CEO at GreenFirst]

There's no more questions. I would like to thank everyone for your continued interest in GreenFirst, and thank you for your participation.

[Operator]

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your line.

Participants

Analysts

• Joel Fournier, CEO at GreenFirst
• Peter Ferrante, CFO at GreenFirst
• Michel Lessard, President at GreenFirst