Canadian lumber producer Interfor watched its profitability slide in the third quarter of 2026, even as sales and production climbed.
The company posted a net loss of $45.6 million, reversing a $1 million profit from the previous quarter, while ongoing U.S. trade duties continued to cloud its outlook, Le Maître Papetier reported.
Despite the steep bottom-line drop, Interfor maintained positive operating cash flow and successfully reduced its net debt during the period. The financial situation still marks an improvement from a year prior, when adjusted EBITDA languished at negative $183.8 million.
Interfor’s revenue reached $832.1 million Canadian, climbing upward from $804.4 million in the second quarter. Yet profitability told a different story. Adjusted EBITDA fell from $92.3 million down to $76.9 million, shrinking the corresponding margin from 11.5% to 9.2%.
The latest net loss included a hefty non-cash impairment charge of $53.2 million tied directly to an idled sawmill in Eastern Canada. The red ink flowed despite rising volume across the producer’s vast footprint.
Interfor’s lumber production increased to 952 million board feet, marking a 3% rise from the previous quarter. This growth drew momentum from the completion of upgrades at its Thomaston, Georgia sawmill alongside higher utilization rates in British Columbia and the southern U.S.
The average sales price also ticked upward by 2% to $751 Canadian per thousand board feet. Inflationary pressures persisted, but unit production costs for the first nine months of 2026 stayed 4% lower than across all of 2025. Speaking on a November 6 conference call, the company confirmed its cost-reduction program is tracking right on schedule to hit an ambitious $80 million in annualized savings.
Cross-border trade headwinds remain a formidable burden. Since October 19, the combined anti-dumping and countervailing duty rate on new Canadian lumber shipments headed to the U.S. rests at 24.75%, down 10.41 percentage points. Still, the additional 10% tariff imposed under Section 232 remains firmly in effect, Le Maître Papetier reported.
The financial fallout from Washington is far from over. Finalization of the 2024 administrative review is expected to trigger a non-cash charge of approximately $63.3 million U.S., plus $11.4 million U.S. in interest, during the fourth quarter.
Interfor’s operations are deeply tied to the American market. Approximately 65% of its total lumber is produced and sold directly within the U.S., while nearly 20% is exported from Canada into that same market, leaving it fully exposed to ongoing trade measures.
Short-term prospects remain restrained. In October, the Western SPF and SYP Composite benchmark indices dropped 6% and 11%, respectively, when compared against their third-quarter averages. Looking ahead, Interfor believes labor constraints, equipment delivery delays, and persistent challenges in selling sawmill by-products could severely limit future U.S. capacity expansion.
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