Bullboard - Stock Discussion Forum Interfor Corp T.IFP

Alternate Symbol(s): IFSPF

Forest Products Lumber & Wood Production

Interfor Corporation is a Canada-based forest products company. The Company and its subsidiaries produce wood products in Canada and the United States for sale to markets around the world. The Company operates through solid wood products segment. The Company offers its products across two categories, which include Dimension Lumber and Specialty Lumber. The Company's products include Interfor... see more

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TSX:IFP - Post Discussion

Interfor Corp > TD

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Post by retiredcf on May 12, 2022 1:04pm

TD

Have a $50.00 target. GLTA

Interfor Corp.

(IFP-T) C$34.08

Exceptional Q1 Results; Slightly Below our Estimates Event

Interfor reported Q1/22 results yesterday after market close. Adjusted EBITDA of $570.1 million was slightly below our estimate of $588.4 million and the consensus forecast of $603.6 million. Adjusted EBITDA included a $68.0 fair value adjustment related to the acquisition of EACOM Timber. Our estimate included a $70.0 million value adjustment; it is unclear to what extent this factor was embedded in the consensus forecast. Adjusted EPS of $6.61 was below our estimate of $6.94 and the consensus forecast of $6.97.

Conference call at 11:00 a.m. ET this morning: 1-833-297-9919.

Impact: NEUTRAL

While Q1 operating results were a little below our forecast, results were still remarkable. Excluding the EACOM fair value adjustment, recurring adjusted EBITDA of $638.1 million was 29% above our estimate of the company's annual mid- cycle (trend) EBITDA.

Details

Interfor's lumber price realizations jumped $588/Mfbm (+72%) q/q. The improvement lagged our expectation, but was generally consistent with peers'.
EACOM generated material results out of the gate. Excluding the fair value adjustment, EACOM contributed adjusted EBITDA of $73.1 million in only five weeks of ownership (11% of total Q1 adjusted EBITDA and 11% of total production).
Adjusted EBITDA margins of 47% more than doubled q/q as surging lumber prices outpaced unit cost inflation. B.C. stumpage cost relief contrasted with modest log cost inflation in the U.S. South (tied to contractor availability limitations).
Consistent with its peers, Interfor built Q1 lumber inventory. Shipping challengescontributed to a 61 million board feet increase to mill inventories during Q1.
Interfor is deploying capital at a rapid pace. After a pause in Q4, Interfor resumed aggressive share buybacks, repurchasing 5.0 million shares (8% of the total at the end of 2021) for $194.3 million in Q1. The company completed its 10% NCIB in April. Despite share buybacks, the $731.2 million EACOM acquisition, higher working capital, and a large tax payment, Interfor ended Q1 with minimal net debt and abundant available liquidity of $483.3 million. Q1/22 FCF was $3.78/ share (11% yield for the quarter). After quarter-end, Interfor disclosed a 16% equity stake in GreenFirst (an eastern Canadian lumber producer) for $55.6 million.