West Fraser Timber Co. Ltd. will record a $409 million non‑cash goodwill impairment for its U.S. lumber operations in the fourth quarter of 2025, reflecting a reassessment of the recoverable value of those assets amid a prolonged downcycle and lower pricing expectations.
The impairment will be reflected in the company’s Q4 2025 financial statements and will reduce reported earnings for the period. West Fraser’s U.S. lumber segment has been under pressure since the third quarter of 2025, when the company reported a net loss of $204 million, a sharp increase from the $83 million loss in Q3 2024. Adjusted EBITDA for the lumber segment fell to a negative $123 million in Q3 2025 from a positive $84 million in Q2 2025, underscoring the depth of margin compression.
Management cited a combination of supply‑demand imbalances, elevated mortgage rates that dampened housing demand, and new Section 232 tariffs on Canadian softwood lumber as key drivers of the downturn. CEO Sean McLaren said the company remains “steadfast in our strategy, taking appropriate action that will ensure our operations remain flexible and sized to meet the needs of our customers while also controlling costs.”
West Fraser’s broader portfolio has been less affected. The North America Engineered Wood Products segment posted a negative Adjusted EBITDA of $15 million in Q3 2025, while the Pulp & Paper segment performed more modestly. The company’s 2026 guidance remains cautious: it targets 2.4 to 2.7 billion board feet of SPF and 2.4 to 2.7 billion board feet of SYP shipments, and plans capital expenditures of $300 to $350 million.
The goodwill impairment signals that West Fraser’s U.S. lumber assets are no longer expected to generate the cash flows that were previously assumed. While the charge is non‑cash, it will reduce reported earnings and may influence investor expectations for the company’s profitability trajectory. The company’s focus on cost control and strategic asset optimization will be critical as it navigates the ongoing market headwinds.
The announcement underscores the broader challenges facing the lumber industry, including higher mortgage rates, trade tariffs, and a shift in demand away from new construction. West Fraser’s diversified operations and disciplined capital allocation strategy are positioned to help the company weather the current cycle, but the impairment highlights the need for continued vigilance in the U.S. lumber segment.
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