Canfor Corporation

Good morning, my name is Joanna and I will be your conference operator today. Welcome to Canfor and Canfor Pulp's first quarter analyst call. All lines have been placed on mute to prevent any background noise. During this call, Canfor and Canfor Pulp's Chief Financial Officer will be referring to a slide presentation that is available in the Investor Relations section of the company's website. Also, the companies would like to point out that this call will include forward-looking statements, so please refer to the press releases for the associated risks of such statements. I would now like to turn the meeting over to Susan Yurkovich, Chief Executive Officer and President of Canfor Corporation. Please go ahead.

Thank you, Joanna, and good morning, everyone. Thanks for joining the Canfor and Canfor Q1 results conference call. I'm going to start by making a few remarks before I turn things over to Stephen Mackey, Canfor's Chief Operating Officer and CEO of Canfor Pulp, and Pat Elliott, Chief Financial Officer of Canfor and Canfor Pulp. In addition, in the room today, we're joined by Kevin Pankratz, our Senior Vice President of Sales and Marketing for Canfor, and Brian Ewan, our Vice President of Sales and Marketing for Canfor Pulse. Following the completion of several strategic initiatives in recent years, Canfor is entering 2025 with a lower-cost, globally diversified lumber platform and a strong balance sheet. While there remains significant uncertainty with respect to the broader economic landscape with the ongoing trade disputes, We are positioned to navigate the current environment supported by the transformation of our lumber business in recent years. With this uncertainty, we expect demand to remain tepid in the short term, but continue to believe that global market fundamentals remain strong for our lumber business, and we're well positioned to capitalize on improved demand over the medium to long term. Although lumber pricing is anticipated to remain volatile through 2025, Significant supply rationalization contributed to higher pricing to start the year, supporting improved results in the first quarter. In addition, we've started to see the benefits of our significant capital investments in our U.S. southern operations and the improvements in our underlying cost structure. Forty percent of our volume now produced in the U.S. south this quarter. While it will take some time to fully ramp these investments, the transformation of our business in recent years has set us up to be more resilient that are able to mitigate market-related pressures and deliver more stable returns over the cycle. And while we expect to enter into an elevated duty environment later this year, and there remains significant uncertainty around tariffs and the ongoing Section 232 investigation, less than 20% of our total sales revenue is exposed to duties or trade disputes. In these challenging times, Canfor continues to maintain a strong balance sheet significant financial flexibility to manage the current headwinds facing our industry. And this balance sheet strength also allows us to continue to pursue strategic growth initiatives should the right opportunity arise, although we will continue to maintain a disciplined approach given the current economic conditions. Finally, with a more modest capital plan in 2025 and significantly improved asset base, We expect Canfor to opportunistically repurchase shares through the year under our normal course issuer bid. And now I'd like to turn it over to Stephen Mackey to provide an overview of Canfor Pulp.

Thanks, Susan, and good morning, everyone. Canfor Pulp generated solid financial results in the first quarter, supported by improved productivity, mostly higher pulp sales realizations, and another strong quarter for our paper business. Our sales realizations benefited from a weak Canadian dollar and a strong pulp pricing in China to start the year. the end of the first quarter, given rising global economic and trade uncertainty. We anticipate lower pricing in the second quarter as trade disruptions weigh on market conditions. Notwithstanding current macroeconomic conditions, Amphipulse is well positioned to manage volatile markets given our unique high-strength fiber characteristics, market diversification efforts, and specialty product focus. In terms of our operating performance, we've seen improved operating results in the last couple quarters, with higher productivity contributing to a 6% increase in fault production and a lower unit cost structure in the first quarter. While we have made progress in stabilizing our operations and currently have adequate chip inventories, there remains uncertainty with respect to fiber supply later this year due to elevated software lumber duties and the current trade environment. As an organization, we continue to focus on operational performance while closely managing our cost structure and optimizing the economically available fiber supply. We'll now turn it over to Pat to provide an overview of our financial results.