RBC December 2, 2021
Forest Products
Key takeaways from the RBC Forest Products Conference
We hosted our annual Forest Products Conference, featuring 11 of the leading forest product companies in North America. The event featured a series of in-depth, interactive discussions with senior executives in the industry. Below, we summarize some of the key themes from the day. For company specific commentary, please see inside this report.
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Interfor Corporation [IFP CN]
Speaker: Ian Fillinger, Chief Executive Officer
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Interfor likes the diversification the EACOM acquisition gives them and are comfortable with where they are in terms of their balance sheet as they are still only at a net debt to invested capital of 22% not including the strong FCF expected in Q4.
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Interfor believes 2022 will be very strong, as customer inventories were high in the summer and those have been worked down, their inventories remain in check with historical levels at around 15 days.
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Although BC is facing a number of issues from a producer standpoint, the company is well positioned given the high quality assets.
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While no thoughts on old growth deferrals were provided, Interfor doesn’t expect much investment in its BC operations in the near-term.
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The company views their position as a pure play lumber company positively, they are the only public company at this scale with this title and provides a clean way to invest in the housing and lumber market.
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In terms of an acquisition in the US South, the company noted that sawmill pricing does seem to have materially moved higher; the South is just not there right now as they need the valuations to move downwards before looking there again.