Interfor Corporation reported a net loss of $106 million in Q3 2024, or $2.05 per share, up from a $76 million net loss in the previous quarter. The adjusted EBITDA loss widened to $22 million, driven by reduced lumber prices, weaker sales, and strategic production curtailments to adapt to ongoing market pressures.

Lumber production in Q3 decreased by 130 million board feet to 904 million, mainly due to production cuts in response to weak demand and elevated interest rates impacting housing-related purchases. In August, Interfor announced indefinite shutdowns of its sawmills in Meldrim, Georgia, and Summerville, South Carolina, representing 330 million board feet in annual capacity. These curtailments resulted in a $17 million impairment charge as the company recalibrated to current demand levels.

Amid continued challenges, Interfor's average lumber selling price fell to $570 per thousand board feet, down from $602 in Q2 2024. Sales revenues also declined, with Q3 sales at $693 million, compared to $771 million in Q2 2024 and $828 million in Q3 2023. Lumber prices remain pressured by an oversupplied market and an economic environment marked by high interest rates and uncertainty.

As part of a broader restructuring, Interfor plans to exit its Quebec operations, recently agreeing to sell three facilities for $30 million. This exit will reduce company-wide capacity by around 5% and has already led to a $74 million impairment charge. An additional $33 million goodwill loss is anticipated upon the transaction's closing, projected for Q4 2024.

Despite these headwinds, Interfor's net debt dropped slightly to $850 million, or 36% of invested capital, down from $877 million at the end of Q2 2024. The company's liquidity position improved to $353 million, reflecting $38 million in positive cash flow from tax refunds and reduced working capital.