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. 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... see more

Add To Watchlist

TSX:IFP - Post Discussion

Interfor Corp > TD

View:

Post by retiredcf on Feb 04, 2022 8:06am

TD

Currently have a $54.00 target. GLTA

Interfor Corp.

(IFP-T) C$37.12

Impressive Q4/21 Results Led by Lower-than-expected Unit Costs Event

Interfor reported Q4/21 results yesterday after market close. Adjusted EBITDA of $149.5 million exceeded our estimate of $123.0 million and the consensus forecast of $141.4 million. Adjusted EPS of $1.29 was also above our estimate of $1.12 and the consensus forecast of $1.25.

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

Impact: SLIGHTLY POSITIVE

There were some minor non-recurring positive elements in Interfor's Q4/21 results, but overall earnings were still impressive, bolstered by strong volumes (organic gains plus recent acquisition benefits), less material price-realization lags than some peers so far this earnings season, and impressive cost control.

Details

Interfor's lumber price realizations improved $78/Mfbm (+10%) q/q — slightly behind our expectation, but outpacing most peers. Of comps that have reported so far this earnings season (WY, PCH, and RFP), the average q/ q price-realization gain was 9%. Reference average Q4/21 cash market Western SPF and SYP composite prices improved 35% and 37%, respectively, q/q. Current U.S. dollar-denominated reference lumber prices are 64-69% above Q4/21 averages.
As expected, lumber shipments declined 5% q/q as inventories increased due to shipping constraints. Production was strong (+4% q/q) as Interfor benefited from recent acquisitions, higher operating rates following Q3/21 curtailments tied to adverse weather, and lower unit costs — the latter, even excluding benefits of lower duty accruals.
Interfor ended the year with net cash of $162.9 million and available liquidity of $1.013 billion. A portion of the company's liquidity cushion is earmarked for the imminent acquisition of the EACOM portfolio ($490.0 million, including working capital, for annual lumber capacity of 985 million board feet, associated cutting rights, an I-joist plant, and a remanufacturing plant). Despite continued balance- sheet improvement through the quarter, the company was not active on share buybacks during the quarter. We expect returns of capital to shareholders to resume after EACOM is integrated and the balance sheet delevers.