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. It operates through the solid wood products segment. The Company’s product categories include Dimension Lumber, Specialty Lumber and Engineered Wood Products. Its products include Spruce-Pine-Fir, Douglas Fir-Larch, Hem-Fir, Southern Yellow Pine, Western Red Cedar, Douglas Fir-Larch, and P3-Joist. Its sawmills provide a diverse range of sustainable products to supply North American markets with a complete offering of framing materials. Its Western Red Cedar products include Elite Decking, Elite Fascia & Boards, Elite V-Joint Paneling, Elite Fineline Paneling, Elite Channel/Lap Siding, Elite Bevel Siding and Elite Shadow Gap Siding. It has an annual lumber production capacity of approximately 5.0 billion board feet and offers a diverse line of lumber products to customers around the world.

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Interfor Corp

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Post by retiredcfon May 12, 2022 1:04pm

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Post# 34678360

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.