Canfor Corporation

Good morning. My name is Joelle, and I will be your conference operator today. Welcome to Canfor and Canfor Pulse second quarter analyst call. All lines have been placed on mute to prevent any background noise. During this call, Canfor and Canfor Pulse 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 Yerkovich, President and CEO of Canfor Corporation.

Please go ahead. Thanks, Joelle, and good morning, everyone. Thanks for joining the Canfor and Canfor Pulse Q2 2025 results conference call. I'm going to open up with a few remarks, then I'll turn it over to Stephen Mackey, Canfor's Chief Operating Officer. and CEO of Canfor Pulp, followed by Pat Elliott, our Chief Financial Officer of Canfor Corp and Canfor Pulp. We've also got Kevin Pankratz, Canfor Senior Vice President of Sales and Marketing, and Brian Ewan, Vice President of Sales and Marketing for Canfor Pulp, who are here with us and available to take questions. While the market conditions remain really challenging, we continue to see improvements in our underlying business, supported by our geographic diversification, the capital investments that we've completed over the last few years, and our ongoing commitment to optimizing our portfolio of assets to enhance our financial performance. To that end, as you know, we made some very tough decisions to close a number of facilities in British Columbia since 2023 due to high costs and ongoing fiber challenges. And in addition, this quarter, we announced the closure of our Estill and Darlington facilities in South Carolina due to persistent weak market conditions and sustained loss at those facilities. In combination, these closures have removed more than 2 billion board feet, better aligning our production capacity with market demand. While extremely difficult for our people and communities, these decisions will enhance Canfor's ability to withstand significant trade headwinds, challenging market conditions, and the general uncertainties that are impacting our business at this time. In transforming our business and leveraging across our globally diversified lumber platform, we believe we will be able to generate more stable cash flow, and enhance our competitiveness over the long term. Despite the challenging market dynamics we're facing right now, our balance sheet remains strong, and it's allowing us to pursue strategic growth at the bottom of the cycle. And this quarter, we were very pleased to announce the pending acquisition of three small sawmills from Carl Hedin in Sweden. These sawmills have exceptionally high-quality fiber in central Sweden, which is a new operating region for Canfor Vida, and will enhance our ability to access global markets and further reduce our reliance on the U.S. market. Supported by recent capital investments and a strong cultural alignment with the identified synergies, these sawmills will complement VITA's operating platform once the acquisition, which is subject to normal closing conditions, is completed later this year. Following this acquisition, our lumber platform will include approximately 35% of our lumber production based in the U.S. South, 35% in Sweden and 30% in Western Canada, providing meaningful geographic product and market diversification for the company. With respect to duties and tariffs, we have, of course, been expecting the increase in duty rates that come into effect this week and have been adjusting our sales strategy accordingly. However, there remains significant uncertainty regarding tariffs and the ongoing Section 232 investigation in the U.S., as well as the broader trade environment. We continue to monitor these developments closely and will adjust our plans to mitigate the impacts to the greatest extent possible. Notwithstanding this uncertainty, we are well-positioned to navigate these challenges, supported by the actions that we've taken over the last several years to build out our low-cost, globally diversified lever platform. I'd now like to turn it over to Stephen Mackey to provide an overview of Camp 4Pol.

Thanks, Susan, and good morning, everyone. Camper pulp generated modest EBITDA in the second quarter, with results reflecting the impact of lower sales realizations due to persistent economic and global trade uncertainty, as well as a 4% stronger Canadian dollar. Weak demand and elevated global pulp inventories contributed to a sharp decline in pricing, particularly in China, where prices fell 7% in the quarter. However, the full impact of these price declines will not be evident in our sales realizations until the third quarter. While pulp pricing in China has stabilized recently, we anticipate weak market fundamentals to persist throughout the third quarter. While our paper business performed reasonably well, we also saw a sharp decline in sales realizations in the second quarter, reflecting the stronger Canadian dollar, weaker pricing in North America due to ongoing tariff and economic uncertainty, and weaker demand driven by the aforementioned economic uncertainty. Notwithstanding the current macroeconomic challenges, camphor pulp continues As an organization, we are adapting to align with current market conditions. We have made progress on improving our productivity and reliability. We currently have an adequate chip supply to support our operating footprint, and we are intently focused on improving our cost structure. While market fundamentals are challenging in the short term, we believe our specialty product focus and unique fiber characteristics combined with an enhanced focus on operational execution and disciplined cost management will allow us to navigate the current market dynamic. We'll now turn it over to Pat to provide an overview of our financial results.