Resolute Forest Products Inc (RFP) 2022 Q1 法說會逐字稿

Good morning, and thank you for standing by. Welcome to Resolute's First Quarter Earnings Call. (Operator Instructions)

早上好，感謝您的收聽。歡迎參加Resolute第一季業績電話會議。 （接線生指示）

I will now turn the call over to Marianne Limoges, Treasurer and Vice President, Investor Relations. Please go ahead.

現在我將把電話轉交給財務主管兼投資者關係副總裁瑪麗安·利摩日 (Marianne Limoges)。請您發言。

Good morning. Welcome to Resolute's First Quarter Earnings Call. Today, we'll hear from Remi Lalonde, President and Chief Executive Officer; and Sylvain Girard, Senior Vice President and Chief Financial Officer.

早安!歡迎參加Resolute第一季財報電話會議。今天，我們將邀請總裁兼執行長Remi Lalonde和資深副總裁兼財務長Sylvain Girard發言。

You can follow along with the slides for today's presentation by logging on to the webcast using the link in the presentations and webcast page under the Investor Relations section of our website, and you can download the slides.

您可以透過我們網站「投資者關係」部分下的簡報和網路廣播頁面中的連結登入網路廣播來關註今天的簡報的幻燈片，然後您可以下載投影片。

Today's presentation will include non-U.S. GAAP financial information. Our press release and the appendix to the slides include a reconciliation of non-GAAP information to U.S. GAAP financial measures.

今天的演示將包含非美國公認會計準則 (US GAAP) 財務資訊。我們的新聞稿和投影片附錄包含非公認會計準則 (US GAAP) 資訊與美國公認會計準則 (US GAAP) 財務指標的對帳表。

We will also make forward-looking statements. Forward-looking information is based on our current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties and can change as condition do. Please review the cautionary statements in our press release and on Slide 2 of today's presentation.

我們也將做出前瞻性陳述。前瞻性資訊是基於我們目前的假設、信念和預期，所有這些假設、信念和預期都包含一系列業務風險和不確定性，並且可能隨情況而變化。請參閱我們新聞稿和今天簡報投影片2中的警示性聲明。

I will turn the call over to Remi.

我將把電話轉給雷米。

Thank you, Marianne. Good morning, and thank you for joining us. Today, we reported $270 million of adjusted EBITDA in the first quarter compared to $111 million in Q4. The results reflect favorable pricing momentum in each of our segments, particularly in wood products and paper. Unfortunately, transportation network improvements were slower than expected. This is especially true in Quebec, where most of our production is based, which has led to lower sales volume and higher inventory levels.

謝謝，瑪麗安。早安，感謝您加入我們。今天，我們公佈了第一季調整後息稅折舊攤提前利潤（EBITDA）為2.7億美元，而第四季為1.11億美元。這項業績反映了我們各部門（尤其是木製品和紙張）良好的定價動能。遺憾的是，運輸網路的改善速度慢於預期。尤其是在我們大部分生產基地魁北克，這導致銷量下降，庫存水準上升。

By segment, we reported adjusted EBITDA of $230 million for wood products, up by $138 million; $26 million in market pulp, up by $1 million; minus $4 million in tissue, down by $3 million; and $34 million for paper, up by $22 million.

按部門劃分，我們報告的木製品調整後 EBITDA 為 2.3 億美元，增加了 1.38 億美元；商品紙漿調整後 EBITDA 為 2600 萬美元，增加了 100 萬美元；紙巾調整後 EBITDA 為 400 萬美元，減少了 300 萬美元；紙張調整後 EBITDA 為 400 萬美元，減少了 300 萬美元；紙張調整後為 20 萬美元。

We further strengthened the balance sheet with significant cash generation in the quarter. And we improved the competitiveness of our business with 2 tuck-in acquisitions in the Wood Products segment, namely: the other 50% of our engineered wood partnership, allowing us to lock in the downstream integration of over 60 million board feet of lumber capacity; and the cogeneration facility adjacent to our Senneterre sawmill, which allows us to maximize the use of biomass from our regional operations, generate green power and further enhance our competitiveness in the Abitibi region.

本季度，我們透過顯著的現金流創造，進一步增強了資產負債表。此外，我們也透過在木製品業務領域進行兩項補充性收購，提升了業務競爭力。這兩項收購分別是：收購工程木材合作夥伴剩餘50%的股份，使我們能夠鎖定超過6000萬板英尺木材產能的下游整合；以及收購毗鄰Senneterre鋸木廠的熱電聯產設施，這使我們能夠最大限度地利用區域運營產生的生物質，生產綠色能源，並進一步增強我們在阿比蒂比地區的競爭力。

With our strong balance sheet and liquidity well over $1 billion, we have significant flexibility to generate long-term value for shareholders and to drive sustainable economic activity in the communities where we operate.

憑藉我們強大的資產負債表和超過 10 億美元的流動性，我們擁有極大的靈活性，可以為股東創造長期價值，並推動我們經營所在社區的可持續經濟活動。

Let's talk about our individual businesses, starting with wood products. First quarter U.S. housing starts reached 1.8 million on a seasonally adjusted annual basis, up by 5% from the previous quarter. Benchmark lumber prices were strong but volatile during the quarter, and the transportation network has been sluggish. Our average transaction price rose to $1,022 per 1,000 board feet, an increase of 410 or 67% from the previous quarter. Production improved by roughly 35 million board feet in the quarter, and we added 12 million board feet equivalent with the new I-joist capacity. But shipments were 86 million board feet lower due to limited railcar and truck availability, particularly in Quebec, which pushed finished goods inventory up by 97 million board feet to 223 million.

讓我們先從木製品業務說起，談談我們各自的業務。第一季度，經季節性調整後，美國新屋開工量達180萬套，較上季成長5%。基準木材價格在本季保持強勁但波動較大，運輸網絡也較為疲軟。我們的平均交易價格上漲至每1,000板英尺1,022美元，季增410美元，漲幅達67%。本季產量增加了約3500萬板英尺，隨著工字梁產能的增加，我們增加了1200萬板英尺的產量。但由於鐵路車輛和卡車供應有限（尤其是在魁北克省），出貨量減少了8600萬板英尺，導緻成品庫存增加了9700萬板英尺，達到2.23億板英尺。

We continue to work hard to adapt to ongoing challenges in the transportation network, and we expect to gradually normalize inventory levels over the second half of the year, starting with a significant improvement in shipments in the second quarter. While underlying fundamentals for building materials remain positive, we are mindful of inflationary pressure and rising interest rates, which could affect pricing and margins.

我們將繼續努力應對運輸網路持續面臨的挑戰，並預計下半年庫存水準將逐步恢復正常，第二季出貨量將顯著改善。儘管建築材料市場的基本面仍然向好，但我們仍關注通膨壓力和利率上升，這可能會影響定價和利潤率。

Global demand for chemical pulp through February rose by 1% with demand for hardwood up by 2% and softwood down by 2%. While Chinese demand has been softer year-to-date, North American and European markets have been resilient. Our average transaction price increased by $9 per metric ton. And our shipments were 28,000 metric tons lower, which reflects the capacity curtailment at Calhoun and significant logistics constraints. As a result, our finished goods inventory rose by 23,000 metric tons.

截至2月份，全球化學漿需求成長了1%，其中硬木需求成長了2%，軟木需求下降了2%。儘管今年迄今中國需求已疲軟，但北美和歐洲市場表現強勁。我們的平均交易價格每噸上漲了9美元。我們的出貨量減少了2.8萬噸，這反映了卡爾霍恩工廠的產能削減和嚴重的物流限制。因此，我們的成品庫存增加了2.3萬噸。

We expect to see a marked price improvement in the coming quarter based on publicly available price announcements. This trend is the result of logistics challenges, the global geopolitical environment and the accumulation of significant unplanned industry downtime. Accordingly, we expect our margins to widen, but the timing of maintenance will offset some of the positive impact in the second quarter. We expect to gradually reduce elevated inventory levels over the course of the year, starting with a modest increase in volume in the second quarter.

根據公開的價格公告，我們預計下一季價格將顯著改善。這一趨勢是物流挑戰、全球地緣政治環境以及大量非計劃性產業停工累積的結果。因此，我們預計利潤率將有所提升，但維護時間將抵消第二季度的部分正面影響。我們預計今年庫存水準將逐步降低，首先從第二季的銷售量小幅成長開始。

Through March, U.S. at-home tissue demand improved by 4%, and the Away-from-Home segment grew by 6%, but to levels still well below pre-pandemic demand. Our average transaction price increased by $47 per short ton or 2% in the quarter due to better product mix, and shipments rose by 1,000 short tons. We expect rising pulp costs in the second quarter to offset incremental average transaction price gains and shipments to remain similar.

截至3月，美國家用衛生紙需求增加了4%，非家用衛生紙需求增加了6%，但仍遠低於疫情前水準。由於產品組合優化，本季我們的平均交易價格上漲了47美元/短噸，漲幅為2%，出貨量也增加了1,000短噸。我們預計第二季紙漿成本的上漲將抵消平均交易價格的增量上漲，出貨量將保持基本持平。

North American demand for uncoated mechanical paper increased by 7% in Q1, mainly due to grade substitution, but newsprint slipped by 6%. Our average transaction price for paper rose by $37 per metric ton or 5% in the quarter due to favorable market conditions in all grades. Our shipments fell by 22,000 metric tons, largely reflecting the capacity curtailment at Calhoun. Finished goods inventory remained elevated at 85,000 metric tons as a result of limited railcar and truck availability. Paper pricing conditions are strong due to limited supply, the macroeconomic environment and logistics constraints, but we expect higher prices to be partly offset by higher planned maintenance in the quarter.

第一季度，北美對未塗佈機械紙的需求增加了7%，主要原因是紙種替代，但新聞紙需求下滑了6%。由於各等級紙種市場行情良好，本季我們紙張的平均交易價格上漲了37美元/噸，漲幅達5%。我們的出貨量下降了2.2萬噸，主要原因是卡爾霍恩工廠的產能縮減。由於鐵路車輛和卡車供應有限，成品庫存仍保持在8.5萬噸的高點。由於供應有限、宏觀經濟環境和物流限制，紙張定價環境強勁，但我們預計本季計畫維護的增加將部分抵銷價格上漲的影響。

I will now ask Sylvain to please discuss our financial performance.

現在我請 Sylvain 討論我們的財務表現。

Thank you, Remi. We reported net income of $177 million in the first quarter or $2.26 per share excluding special items. This compares to net income excluding special items of $37 million or $0.48 per share in the previous quarter and net income excluding special items of $119 million or $1.45 per share in the same period last year.

謝謝你，雷米。我們第一季淨利為1.77億美元，即每股2.26美元（不含特殊項目）。相較之下，上一季淨利為3,700萬美元，即每股0.48美元；去年同期淨利為1.19億美元，即每股1.45美元。

Special items in the first quarter included $45 million in other income, mostly due to a gain on our 50% equity interest in the Resolute LP-I-joist partnership in connection with the acquisition, $7 million in nonoperating pension and other postretirement benefit costs and $4 million of closure-related charges for the indefinite idling of the Calhoun mill.

第一季的特殊項目包括 4,500 萬美元的其他收入，主要是由於我們在收購 Resolute LP-I-joist 合夥企業時獲得的 50% 股權收益、700 萬美元的非經營性退休金和其他退休後福利成本以及 400 萬美元的卡爾霍恩工廠無限期停產關閉相關費用。

Compared to the previous quarter, our results include a favorable impact of $7 million from the independent idling of pulp and paper operations at the Calhoun mill, which occurred early in the first quarter. We reduced our 2022 cash closure cost expectations for Calhoun pulp and paper operations down to $22 million from $32 million.

與上一季相比，我們的業績已計入卡爾霍恩工廠紙漿和造紙業務在第一季初獨立停產帶來的700萬美元的有利影響。我們將卡爾霍恩工廠2022年紙漿和造紙業務的現金關閉成本預期從3,200萬美元下調至2,200萬美元。

Total sales in the quarter were $945 million, up by $111 million compared to the fourth quarter, reflecting higher realized prices in all segments, partially offset by lower shipments as a result of logistic constraints and the indefinite idling of our Calhoun pulp and paper operations. Mainly driven by higher log costs, manufacturing costs rose by $23 million in the quarter after removing the impact of volume, including the capacity curtailment at Calhoun and foreign exchange.

本季總銷售額為9.45億美元，較第四季成長1.11億美元，反映出所有業務部門的實際價格上漲，但部分抵銷了物流限制以及卡爾霍恩紙漿和造紙業務無限期停產導致的出貨量下降。主要受原木成本上漲的影響，在剔除產量影響（包括卡爾霍恩產能縮減和外匯影響）後，本季製造成本上漲了2,300萬美元。

Compared to the fourth quarter, all-in delivered cost for the Wood Products segment rose by $77 per 1,000 board feet or 17%, mainly reflecting higher stumpage fees and harvesting expenses. EBITDA in the segment improved by $138 million to $230 million.

與第四季相比，木製品部門的總交付成本每千板英尺上漲77美元，漲幅17%，主要反映了伐木費和採伐費用的增加。該部門的息稅折舊攤提前利潤（EBITDA）增加了1.38億美元，達到2.3億美元。

In the market pulp segment, delivered costs decreased by $8 per metric ton or 1%. EBITDA in the segment improved by $1 million to $26 million. The delivered cost in tissue increased by $141 per short ton or 7%, mostly due to higher pulp prices, including the loss of direct pulp integration at the Calhoun mill. EBITDA for the segment fell $3 million to negative $4 million.

商品紙漿業務的交付成本每公噸下降8美元，降幅1%。該業務的EBITDA成長100萬美元，達到2,600萬美元。衛生紙業務的交付成本每短噸增加141美元，增幅7%，主要原因是紙漿價格上漲，包括卡爾霍恩工廠直接紙漿整合業務的損失。該業務的EBITDA下降300萬美元，至負400萬美元。

Paper's delivered costs decreased by $47 per metric ton or 6% due to lower overall operating costs following the curtailment at Calhoun, partly offset by higher freight costs. EBITDA for the segment improved by $22 million to $34 million.

紙張交付成本每噸下降47美元，降幅6%，原因是卡爾霍恩工廠減產後整體營運成本下降，但運費上漲部分抵銷了這一影響。該部門息稅折舊攤提前利潤（EBITDA）成長2,200萬美元，達到3,400萬美元。

We generated $147 million of cash from operating activities in the quarter despite an increase of $67 million of inventory, mainly as a result of logistic constraints and the seasonal buildup of log ahead of the spring breakup. We expect log inventory to come down during the second quarter; and for finished goods inventory, levels to gradually normalize in the second half of the year.

本季度，儘管庫存增加了6700萬美元，但經營活動仍產生了1.47億美元的現金，這主要歸因於物流限制以及春季分揀前原木的季節性囤積。我們預計原木庫存將在第二季下降；而成品庫存水準將在下半年逐步恢復正常。

In March, we completed the acquisition of the I-joist partnership for $50 million, net of cash acquired and working capital adjustments. We made $13 million in capital expenditures during the first quarter, and we maintained our $130 million target for the year.

3月份，我們完成了I-joist合夥企業的收購，收購價格為5,000萬美元（扣除現金和營運資本調整）。第一季度，我們的資本支出為1,300萬美元，並維持了1.3億美元的年度目標。

We also made $43 million in softwood lumber duty deposits in the quarter, bringing our total deposits to $440 million, which is recorded in other assets on the balance sheet.

本季我們也存入了 4,300 萬美元的軟木稅存款，使我們的總存款達到 4.4 億美元，這些存款記錄在資產負債表的其他資產中。

On April 6, Moody's announced a credit rating upgrade to Ba3 from B1 with a stable outlook as a result of our improved financial performance and leverage. With strong cash flow generation in the quarter, our net debt fell to only $140 million at quarter end with a leverage ratio approaching 0 excluding pensions, and our liquidity was over $1.1 billion.

4月6日，穆迪宣布將我們的信用評等從B1上調至Ba3，展望穩定，這得益於我們財務表現和槓桿率的提升。憑藉本季強勁的現金流創造，我們的淨債務在季末降至僅1.4億美元，槓桿率（不包括退休金）接近0，我們的流動性超過11億美元。

Finally, we contributed $20 million to pension plans in the quarter and made OPEB payments of $3 million. Considering the significant increase in bond yields since year-end, it's a year which to end on March 31, the pro forma accounting deficit would have been $825 million, down from $1.41 billion. On the other hand, the funding deficit increased to $525 million due to Q1 market performance. We will conduct a formal revaluation of the accounting position only at year-end in accordance with U.S. GAAP rules.

最後，我們在本季向退休金計畫繳納了2,000萬美元，並支付了300萬美元的OPEB款項。考慮到自年底以來債券殖利率的大幅上升，如果以3月31日為基準，會計赤字預計將為8.25億美元，低於14.1億美元。另一方面，由於第一季的市場表現，資金缺口增加至5.25億美元。我們將根據美國公認會計準則，在年底對會計狀況進行正式的重估。

All right. Thank you, Sylvain. Our strategic objectives for the company remain focused on growing our wood products and pulp businesses and on driving further improvements in our overall asset performance. To that end, our current priorities in wood products are: integrating our recent acquisitions in Quebec, continuing to enhance productivity in our U.S. sawmills and investing in our assets with strategic capital projects and ensuring their disciplined execution.

好的。謝謝你，Sylvain。我們公司的策略目標仍專注於發展木製品和紙漿業務，並進一步提升整體資產績效。為此，我們目前在木製品領域的重點是：整合近期在魁北克的收購，繼續提高美國鋸木廠的生產力，並透過策略性資本項目投資於我們的資產，並確保其有序執行。

For pulp, we are driving operational efficiency and productivity and investing strategically to grow capacity organically. Following the indefinite idling of pulp and paper operations at Calhoun, we indicated last quarter that we would review strategic options for the tissue business. As part of this exercise, we recently launched a sales process to explore divestiture options.

在紙漿業務方面，我們正在提升營運效率和生產力，並進行策略性投資，以實現產能的有機成長。在卡爾霍恩工廠的紙漿和造紙業務無限期停產後，我們上個季度表示將重新評估衛生紙業務的策略選擇。作為這項工作的一部分，我們最近啟動了一項出售流程，以探索資產剝離的方案。

In the coming days, we will start main table bargaining with union leaders representing many of our Canadian pulp and paper employees. Our union partners have been instrumental in our progress as a company, and their contribution is critical to our continued success. We look forward to a constructive, open and collaborative dialogue building on our shared goal of making sure Resolute remains an employer of choice and a successful company contributing to vibrant communities.

未來幾天，我們將與代表眾多加拿大紙漿和造紙員工的工會領導人展開主談判。我們的工會夥伴在我們公司的發展過程中發揮了重要作用，他們的貢獻對我們持續成功至關重要。我們期待進行建設性、開放和協作的對話，以共同目標為基礎，確保Resolute繼續成為我們首選的雇主，並成為一家為充滿活力的社區做出貢獻的成功公司。

In closing, I'm pleased to confirm that we surpassed our 30% absolute GHG emissions reduction target, cutting them by 34% from 2015 levels.

最後，我很高興地確認，我們超額完成了 30% 絕對溫室氣體減排目標，比 2015 年的水準減少了 34%。

This concludes our formal presentation. Operator, we'll now open the call for questions.

我們的正式演講到此結束。接線員，我們現在開始提問環節。

(Operator Instructions) Your first question comes from the line of Hamir Patel of CIBC Capital Markets.

（操作員指示）您的第一個問題來自加拿大帝國商業銀行資本市場的哈米爾·帕特爾 (Hamir Patel)。

Remi, there's been an unprecedented array of paper and newsprint hikes in recent months. Will that eventually hit your entire domestic paper business? Or do you have some long-term legacy contract prices that may limit the upside to realizations?

雷米，最近幾個月，紙張和新聞紙的價格出現了前所未有的上漲。這最終會影響到你們整個國內紙張業務嗎？或者說，你們是否存在一些長期遺留的合約價格，可能會​​限制價格上漲的潛力？

No. We're -- I mean we are always trying to get win-win deals with our customers, Hamir, but I would tell you that there are not too many long-term contracts that would limit the upside. We do, as you could see in this quarter, have realized a significant improvement in pricing, and we expect that to continue. So there aren't many long-term contracts that would limit our upside there.

不。哈米爾，我的意思是，我們一直在努力與客戶達成雙贏的協議，但我要告訴你，不會有太多的長期合約會限制我們的獲利。正如你在本季看到的，我們的定價確實有了顯著的改善，我們預計這種情況會持續下去。所以，不會有太多的長期合約會限制我們的獲利。

Okay. Great. That's helpful. And just on the tissue strategic alternatives process. Do you have a sense as to when you would expect that process to conclude?

好的。太好了。這很有幫助。關於組織策略替代方案流程，您預期流程何時結束？

No, not yet, Hamir. I mean we've launched it, and so we let -- we need to let the process follow its course, and we'll see it through. But I don't have anything to report as of yet, and I'm not quite sure yet how long it will take to work it through.

不，還沒有，哈米爾。我的意思是，我們已經啟動了，所以我們需要讓這個過程順其自然，我們會堅持到底。但目前我還沒有任何可以報告的消息，而且我也不太確定需要多長時間才能完成。

Your next question comes from the line of Kasia Kopytek of TD Securities.

您的下一個問題來自道明證券的 Kasia Kopytek。

It's Kasia calling in for Sean. First question is on inflation. Will you guys be able to talk about inflation and just how that trended this quarter relative to what you were expecting heading into the quarter?

我是卡西亞，代替肖恩。第一個問題是關於通貨膨脹的。你們能談談通貨膨脹的情況嗎？以及本季的通貨膨脹趨勢與你們之前預期的相比如何？

Yes. No, absolutely. So what we were expecting last quarter was for a slight reduction in energy prices as a function of natural gas prices. We were expecting fiber to go up just on the basis of lumber prices and freight also to come up. And what actually happened is an increase in total costs by $23 million, all of which really came from higher log costs as a result, as we indicated, of stumpage fees for higher lumber prices. And we also saw increase in freight costs as a result of the logistics constraints that we've been talking about and a slight uptick in energy prices.

是的，絕對不是。我們上個季度的預期是，能源價格會因天然氣價格上漲而略有下降。我們原本預計，僅木材價格上漲，纖維價格也會上漲，運費也會上漲。但實際發生的情況是，總成本增加了2,300萬美元，這實際上全部源自於原木成本上漲，正如我們之前提到的，這是木材價格上漲導致的伐木費上漲。此外，由於我們一直在討論的物流限制以及能源價格略有上漲，運費也出現了上漲。

On the favorable side, we did get the benefit of removing Calhoun as a result of the indefinite idling of pulp and paper operations there. And we saw a bit better on power generation and lower SG&A because in the last quarter, we recorded a mark-to-market for some of the equity-based compensation. So that's the key items.

有利的一面是，由於卡爾霍恩工廠的紙漿和造紙業務無限期停產，我們確實受益於此。此外，由於上個季度我們對部分股權激勵進行了市價調整，發電量有所改善，銷售、一般及行政費用（SG&A）也有所下降。所以，這些都是關鍵項目。

In terms of what we expect in the quarter ahead, we -- stumpage fees will be a function of lumber prices. We expect that freight costs will remain elevated because we still have high inventory and facing some challenges around logistics constraints, and we are expecting an uptick in maintenance costs as we head into just normal spring maintenance season.

就我們對下一季的預期而言，伐木費將取決於木材價格。我們預計運費仍將維持高位，因為我們庫存仍然充足，並且面臨物流方面的一些挑戰。此外，隨著春季維護季節的到來，我們預計維護成本也將上升。

That's great detail. And just on that last point, any guidance you can provide in terms of magnitude of impacts for the future for the maintenance?

非常詳細。關於最後一點，您能就維護對未來的影響程度提供一些指導嗎？

In pulp and paper, I would be looking for plus $20 million quarter-over-quarter.

在紙漿和造紙方面，我預計季度將比去年同期成長 2000 萬美元。

Okay. Great. And then you spoke a lot about logistic constraints and how you expect inventories to gradually normalize over the course of the year. Did you take any downtime this quarter related to shipping constraints? Maybe more important, how is your platform running now? I think you referenced 233 million board feet of finished inventories in lumber. Is that historically elevated? If you can just provide context on that.

好的。太好了。然後您談了很多關於物流限制以及您預計庫存將在一年內逐漸恢復正常的問題。本季您是否因為運輸限製而暫停了一段時間？也許更重要的是，您的平台現在運作得怎麼樣？我記得您提到了2.33億板英尺的成品木材庫存。這是否處於歷史高點？能否提供一些背景資訊？

No, that's a good question, Kasia. So I mean, for us, the logistics constraints are reflected in excess inventory. And so we have, as we talked about, finished goods here of $57 million on the balance sheet from last quarter, and we had higher freight costs of $8 million. We did not have any significant production interruptions as a result, so we're really building inventory.

不，卡西亞，你問得好。我的意思是，對我們來說，物流限制反映在庫存過剩上。正如我們之前提到的，上季度我們的資產負債表上顯示成品庫存為5700萬美元，運費成本增加了800萬美元。我們沒有因此而出現任何重大生產中斷，所以我們確實在增加庫存。

So the way we think about it is that this is really EBITDA deferred as opposed to denied. And 223 million board feet of inventory for the lumber business, I would characterize as very high. It's about double what it was at the end of, call it, 2020. So we'd like to keep it at, say, 100 million to 125 million board feet, so 225 million is on the high side. So it's going to take a little bit of time before we can get all of that distributed, but we expect to work it down over the second half of the year, starting with a modest increase in shipments here in the second quarter. Actually, in the lumber business, we expect a significant increase in shipments, about 100 million board feet.

所以我們認為這其實是遞延EBITDA，而不是拒付。木材業務的庫存量為2.23億板英尺，我認為這非常高。這大約是2020年底的兩倍。所以我們希望將其保持在1億到1.25億板英尺之間，所以2.25億板英尺是偏高的。所以，我們需要一些時間才能全部分配完畢，但我們預計下半年庫存量會逐漸下降，從第二季的出貨量小幅增長開始。實際上，在木材業務方面，我們預計出貨量將大幅成長，約1億板英尺。

That's good detail. And last one for me, just broadly speaking, just strategic objectives, you gave some context already. But where does M&A figure in your strategic pecking order? And how do you look at return of capital for the shareholder? You guys still have most of the $100 million buyback authorized in the (inaudible) if I recall correctly.

這細節很到位。最後一個問題，廣義上講，就策略目標而言，您已經給了一些背景資訊。但是，併購在您的策略優先順序中處於什麼位置？您如何看待股東的資本回報？如果我沒記錯的話，你們仍然擁有（聽不清楚）授權的1億美元回購的大部分。

So I mean M&A is a tool that we use. And so if you look at, say, in the first quarter, we bought out our partner in the I-joist business. We acquired a cogeneration facility in the Abitibi region to tactically improve the competitive position of our lumber business. We also did buy the 3 U.S. sawmills from Conifex 2 years ago.

所以我的意思是，併購是我們常用的工具。例如，在第一季度，我們收購了I型梁業務的合作夥伴。我們收購了阿比蒂比地區的一家熱電聯產設施，以戰術性地提升我們木材業務的競爭地位。兩年前，我們也從Conifex收購了三家美國鋸木廠。

So we always think of M&A in terms of value-added synergistic acquisitions, but it has to make sense for us. But the way that we think about it, Kasia, is rather than looking at M&A with significant valuations where your return expectations are only slightly better than your cost of capital, it kind of forces us to look inward and to realize that some of our highest return opportunities are investing in our own assets and growing them organically, which is why we've got a fairly full pipeline of capital projects.

因此，我們始終將併購視為增值協同收購，但這對我們來說必須有意義。卡西亞，我們的想法是，與其將併購與估值高昂、預期回報僅略高於資本成本的併購聯繫起來，不如將其視為內部併購，這迫使我們審視自身，意識到一些最高回報的機會在於投資於我們自己的資產並使其有機增長，這就是為什麼我們擁有相當豐富的資本項目儲備。

We still expect to make about $130 million of investments this year, including the projects in the lumber business that we announced last summer, and those are really high-return projects that we're pretty excited about. So we want to take a balanced approach to capital allocation. We talked also about some of the things that we're doing around share buybacks, which we've been active on, and debt reduction, too.

我們預計今年仍將進行約1.3億美元的投資，包括去年夏天宣布的木材業務項目，這些項目回報豐厚，我們對此感到非常興奮。因此，我們希望採取均衡的資本配置方式。我們也談到了我們正在進行的股票回購（我們一直在積極進行）以及債務削減等措施。

But the big picture for the company is that we had very strong cash generation in the quarter, and we're getting pretty close to having a net cash position, which when you look at the history of the company is a pretty good thing.

但對於公司來說，整體情況是，我們本季的現金創造能力非常強勁，而且我們非常接近淨現金狀況，從公司的歷史來看，這是一件非常好的事情。

Your next question comes from the line of Paul Quinn with RBC Capital Markets.

您的下一個問題來自加拿大皇家銀行資本市場的保羅奎因 (Paul Quinn)。

This is Matt McKellar on for Paul Quinn. First, if we can get your thoughts on the sustainability of paper pricing here and how you expect pricing to evolve over the near and medium term given limited supply and logistics constraints you mentioned.

我是 Paul Quinn 的 Matt McKellar。首先，我們想了解您對紙張定價可持續性的看法，以及考慮到您提到的供應有限和物流限制，您預計短期和中期紙張定價將如何演變。

Well, we think that paper prices are strong and will continue to be strong. There are, as you indicated, a number of factors involved in that. We have increased our expectations around the free cash flow generation from the paper business in the next 5 years just on the basis of how tight conditions are, especially in 2022 and 2023.

嗯，我們認為紙價目前堅挺，而且會持續走強。正如您所說，這其中有很多因素。我們上調了對未來五年造紙業務自由現金流的預期，這主要基於市場環境的緊張，尤其是在2022年和2023年。

Paper is obviously very impacted by capacity. And we think in today's environment, bringing additional paper capacity can be challenging. We're certainly not planning to bring additional paper capacity. If you think about the cost inflation around energy, chemicals, logistics, the cost of and availability of labor. There's a lot of challenges around bringing additional capacity online.

紙張顯然受產能影響很大。我們認為，在當今環境下，增加紙張產能可能頗具挑戰性。我們當然不打算增加紙張產能。考慮到能源、化學品、物流以及勞動成本和可用性方面的成本上漲，增加產能面臨許多挑戰。

So the secular decline trend will remain, but we think that the runway for the next couple of years remains healthy, and we're still very encouraged by the free cash flow potential from that business for the next few years.

因此，長期下降趨勢仍將持續，但我們認為未來幾年的運行軌道仍然健康，而且我們仍然對該業務未來幾年的自由現金流潛力感到非常鼓舞。

Great. That's really helpful. Maybe next, just wondering if you have any sort of refreshed outlook for the engineered wood products business, including whether you're thinking about your business any differently now following the acquisition of your partner's 50% interest and maybe how you're thinking about contribution and growth there going forward.

太好了。這真的很有幫助。接下來，我想問一下，您對工程木製品業務有什麼新的展望嗎？包括在收購合作夥伴50%的股份後，您對業務的看法是否有了新的變化？以及您如何看待未來的貢獻和成長？

Well, I could tell you that the business generated $12 million of EBITDA in the first quarter. So we're pretty excited about bringing the I-joist business in the family, if you will. As you know, it was an equity pickup before, so this is the first time that we're including the EBITDA. I think that the underlying fundamentals for the I-joist business are really key off of building materials forecasts. And so if you think about the underlying trends that are driving demand in the lumber market, the historical underbuilding in the last decade, the demographics that are favorable to the future, we think it's a good place to be. The additional benefit for Resolute is that it allows us to integrate downstream 60 million board feet of lumber capacity in-house. So no, we're pretty excited about the business.

我可以告訴您，該業務在第一季創造了1200萬美元的EBITDA。所以，如果您願意的話，我們非常高興將I型梁業務納入我們的家族。如您所知，之前是股權收購，所以這是我們第一次將EBITDA納入其中。我認為I型梁業務的基本面實際上取決於建築材料預測。因此，如果您考慮推動木材市場需求的潛在趨勢、過去十年的歷史性建設不足以及有利於未來的人口統計數據，我們認為這是一個不錯的選擇。 Resolute的另一個好處是，它使我們能夠在內部整合下游6000萬板英尺的木材產能。所以，我們對這項業務感到非常興奮。

There are no further questions at this time. Madam Limoges, I turn the call back over to you.

目前沒有其他問題了。利摩日女士，我把電話轉回給您。

Thank you. Thank you, everyone, for joining us today. We wish you a great day.

謝謝大家！感謝大家今天加入我們。祝大家有美好的一天。

Thanks.

謝謝。

That concludes today's conference call. You may now disconnect your lines.

今天的電話會議到此結束。各位現在可以掛斷電話了。