GreenFirst Forest Products (TSE:GFP) reported a return to positive operating income and EBITDA in the second quarter of 2026 as higher lumber shipments, stronger prices and improved mill efficiency lifted results from the prior quarter.
Chief Executive Officer Joel Fournier said production rose more than 20% sequentially while shipment volume increased more than 40%. Net sales reached approximately C$96 million, supported by the company’s strongest shipment quarter in two years and improved lumber grade mix.
Revenue and profitability improve
Chief Financial Officer Peter Ferrante said second-quarter revenue totaled C$96.1 million, up from C$60.6 million in the first quarter and C$84.5 million in the year-earlier quarter. Lumber sales accounted for C$91 million of revenue, while by-product revenue totaled C$5.1 million.
Average gross lumber selling prices rose to C$765 per thousand board feet, while average net selling prices were C$486 per thousand board feet after duties and tariffs. Fournier said average lumber selling prices increased by about C$60 per thousand MFBM from the first quarter.
Cost of sales was C$62.1 million, essentially unchanged from the first quarter despite a more than 40% increase in shipments, according to Ferrante. He attributed the performance to higher production, better manufacturing efficiency and fixed-cost absorption. The quarter also benefited from a reversal of previously recognized inventory valuation reserves, reflecting stronger lumber prices, lower manufacturing costs and an improved inventory mix.
GreenFirst also recognized about C$3 million in previously approved funding under Ontario’s Sawmill Chip Support Program. Fournier said the company received approximately C$3.2 million through the provincial program during the quarter.
- Operating income was C$7.9 million, compared with an operating loss of C$19 million in the first quarter.
- EBITDA from continuing operations was C$11.8 million, compared with negative C$15.1 million in the prior quarter.
- Production increased 22% sequentially to nearly 111 million board feet.
- Shipments rose 43% to 119 million board feet, exceeding production and reducing inventory.
- Selling, general and administrative expense was C$4.3 million, consistent with the first quarter.
Duties, tariffs and liquidity remain pressures
Despite the improved operating results, management said export duties and tariffs remained a substantial cost. Fournier said the company incurred approximately US$21 million in duties and tariffs during the second quarter, up US$13 million from the same quarter a year earlier. Ferrante said duties and tariffs totaled $21.1 million in the quarter, compared with $12.1 million in the first quarter, primarily due to higher export volumes under elevated rates.
Michel Lessard, GreenFirst’s president, said the company had paid C$33 million year to date, consisting of C$26 million in duties and C$7 million in tariffs. He said a future reduction in duties or a broader trade agreement would be positive for the company and the Canadian forest-products industry.
Lessard said GreenFirst does not expect lumber prices to move dollar-for-dollar with any decline in duties, noting that supply-and-demand conditions will remain the principal driver of pricing. He said producers could capture part of the benefit through improved margins, depending on market conditions.
The company ended the quarter with C$2.8 million in cash, down from C$6.5 million at the end of the first quarter. Operating activities generated C$2.4 million of cash, while financing activities used C$5.1 million, largely for lease, equipment-financing and revolving-credit-facility repayments. Capital expenditures were approximately C$900,000.
Ferrante said GreenFirst continues to have access to its revolving credit facility and other financing arrangements, while management remains focused on working-capital management, capital discipline and converting improved operating results into sustainable cash flow.
Chapleau ramp-up and market outlook
Fournier said GreenFirst’s new Large Log Line at its Chapleau mill continues to ramp up, although commissioning has taken longer than initially expected. The company expects the ramp-up to continue through the remainder of 2026 and expects the line to make its full financial contribution by year-end.
He said Chapleau’s productive volume increased more than 35% in the second quarter versus the first quarter and contributed to improved manufacturing performance. The company is also evaluating smaller strategic capital projects, such as saw-line speed-control systems, intended to increase throughput and reduce costs.
Management said it is working with Texana on the feasibility of a torrefied pellet facility in Chapleau that could use sawmill residuals and potentially support lower-carbon power generation. The feasibility work is expected to be completed in the third quarter. Subject to approvals, financing and a final investment decision, construction could begin in late 2027.
Fournier said lumber market conditions improved in the second quarter as Canadian mill curtailments reduced capacity and demand improved modestly. However, he said home affordability remains constrained, citing a 6.58% mortgage rate in July, and management remains cautious about lumber-price conditions in the second half of the year.
CEO plans departure
Fournier also announced that he will resign as GreenFirst’s CEO effective Oct. 31, 2026. He said he would support a smooth transition and expressed confidence in the company’s long-term potential.
About GreenFirst Forest Products (TSE:GFP)
GreenFirst Forest Products is a forest-first business, focused on sustainable forest management and lumber production. The Company owns four sawmills located in rich wood baskets proudly operating over six million hectares of FSC® certified public Ontario forest lands (FSC®-C167905). The Company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provide GreenFirst with significant cyclical and secular advantages in building products.
