West Fraser Timber Co Ltd (WFG) 2023 Q1 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to West Fraser Q1 2023 Results Conference Call. (Operator Instructions)

早上好，女士們，先生們。歡迎來到西弗雷澤 2023 年第一季度業績電話會議。 （操作員說明）

During this conference call, with Fraser's representatives will be making certain statements about West Fraser's future financial and operational performance, business outlook and capital plans. These statements may constitute forward-looking information or forward-looking statements within the meaning of Canadian and United States securities laws.

在本次電話會議中，Fraser 的代表將就 West Fraser 未來的財務和運營業績、業務前景和資本計劃發表某些聲明。這些陳述可能構成加拿大和美國證券法含義內的前瞻性信息或前瞻性陳述。

Such statements involve certain risks, uncertainties and assumptions because West Fraser's actual or future results and performance could be materially different from those expressed or implied in these statements. Additional information about these risk factors and assumptions is included both in the accompanying webcast presentation in our 2022 Annual MD&A and Annual Information Form, which can be accessed on West Fraser's websites or through SEDAR for Canadian investors and EDGAR for United States investors.

此類陳述涉及某些風險、不確定性和假設，因為 West Fraser 的實際或未來結果和業績可能與這些陳述中明示或暗示的結果和業績存在重大差異。有關這些風險因素和假設的更多信息包含在我們 2022 年年度 MD&A 和年度信息表中隨附的網絡廣播演示中，可以在 West Fraser 的網站上訪問，也可以通過加拿大投資者的 SEDAR 和美國投資者的 EDGAR 訪問。

Thank you. Mr. Chris Virostek you may begin your conference.

謝謝。 Chris Virostek 先生，您可以開始您的會議了。

Thank you, Julie. Good morning, everyone and thank you for joining our first quarter 2023 earnings call. I'm Chris Virostek, Chief Financial Officer of West Fraser. And joining me today are Ray Ferris, our President and CEO; and Matt Tobin, our Vice President of Sales and Marketing; and other members of the executive team.

謝謝你，朱莉。大家早上好，感謝您參加我們的 2023 年第一季度財報電話會議。我是 West Fraser 的首席財務官 Chris Virostek。今天加入我的是我們的總裁兼首席執行官 Ray Ferris；以及我們的銷售和營銷副總裁 Matt Tobin；以及執行團隊的其他成員。

I'll begin with a brief overview of West Fraser's Q1 2023 financial results and then pass the call to Ray who will give an update on the business as well as provide a few concluding remarks before we transition the call to Q&A.

我將首先簡要概述 West Fraser 的 2023 年第一季度財務業績，然後將電話轉給 Ray，他將介紹業務的最新情況，並在我們將電話轉為問答之前提供一些總結性意見。

Our comments today will be brief as we recently provided a company update at last week's Annual General Meeting. As a reminder, we report in U.S. dollars and all references today will be the U.S. dollar amounts, unless otherwise indicated.

我們今天的評論將是簡短的，因為我們最近在上週的年度股東大會上提供了公司更新。提醒一下，我們以美元報告，除非另有說明，否則今天的所有參考資料均為美元金額。

West Fraser generated $58 million of adjusted EBITDA in the first quarter. This was largely comparable to the $70 million of adjusted EBITDA generated in the fourth quarter, which included a onetime $7 million benefit of carbon credits from our EU business, as well as a $14 million insurance recovery from our North American engineered wood business.

West Fraser 在第一季度產生了 5800 萬美元的調整後 EBITDA。這在很大程度上與第四季度產生的 7000 萬美元調整後 EBITDA 相當，其中包括來自我們歐盟業務的一次性 700 萬美元碳信用收益，以及來自我們北美工程木材業務的 1400 萬美元保險回收。

Our North American EWP segment generated $31 million of adjusted EBITDA, down from $109 million in the prior quarter. This Q1 result included a $15 million inventory write-down, while the prior quarter had benefited from the $14 million insurance recovery just noted.

我們的北美 EWP 部門產生了 3100 萬美元的調整後 EBITDA，低於上一季度的 1.09 億美元。第一季度的結果包括 1500 萬美元的庫存減記，而上一季度受益於剛才提到的 1400 萬美元的保險回收。

The Lumber segment had 0 adjusted EBITDA, improving from negative $77 million in the prior quarter. You recall that prior quarter included a $39 million inventory write-down recognized, as lumber prices reached a near-term low at the end of last year.

木材部門的調整後 EBITDA 為 0，較上一季度的負 7700 萬美元有所改善。您還記得上一季度包括確認的 3900 萬美元庫存減記，因為去年年底木材價格達到近期低點。

The Pulp & Paper segment generated $7 million of adjusted EBITDA in the first quarter versus $15 million in the prior quarter. While in Europe, adjusted EBITDA was $20 million in the first quarter, down from $30 million in the fourth quarter, a period that has included a onetime $7 million benefit from the sale of carbon credits.

紙漿和造紙部門在第一季度產生了 700 萬美元的調整後 EBITDA，而上一季度為 1500 萬美元。而在歐洲，第一季度調整後的 EBITDA 為 2,000 萬美元，低於第四季度的 3,000 萬美元，第四季度還包括來自碳信用額度銷售的一次性 700 萬美元收益。

Price decreases were the largest driver of the sequential EBITDA declines across our lumber and North American EWP businesses.

價格下跌是我們木材和北美 EWP 業務連續 EBITDA 下降的最大驅動因素。

Cash from operations was (inaudible) $198 million for the quarter, though our cash position remained very healthy. Cash, net of debt, decreased to $309 million in the first quarter from $625 million last quarter as we paid $25 million of dividends, spent nearly $100 million on capital expenditures and invested seasonally more than $200 million in our working capital build.

本季度來自運營的現金（聽不清）為 1.98 億美元，但我們的現金狀況仍然非常健康。第一季度扣除債務後的現金從上一季度的 6.25 億美元減少到 3.09 億美元，因為我們支付了 2500 萬美元的股息，將近 1 億美元用於資本支出，並且季節性地投資超過 2 億美元用於營運資本建設。

In terms of our outlook for 2023, we are reiterating our operational guidance for the year, as detailed in our earnings release, including ranges for key product shipments and our planned capital expenditure. Capital allocation is an important part of how we run our business every day at West Fraser. Our capital allocation strategy is a durable three-pronged approach where we reinvest in the business, maintain financial flexibility that allows us to pursue inorganic and organic growth -- strategic growth opportunities and return excess capital to shareholders.

就我們對 2023 年的展望而言，我們重申了我們今年的運營指導，詳見我們的收益發布，包括主要產品出貨量的範圍和我們計劃的資本支出。資本配置是我們每天在 West Fraser 開展業務的重要組成部分。我們的資本配置戰略是一種持久的三管齊下的方法，我們對業務進行再投資，保持財務靈活性，使我們能夠追求無機和有機增長——戰略增長機會，並將多餘的資本返還給股東。

This strategy has served us well over the years. And frankly, we think it is this balanced and prudent approach that has put us in a position of strength today despite softer market conditions.

多年來，這一策略對我們很有幫助。坦率地說，我們認為正是這種平衡和審慎的做法使我們在今天的市場環境疲軟的情況下處於有利地位。

Sticking to the specifics for a moment. Since 2016, a period that has seen both up and down cycles, we have generated more than $8.5 billion of cash from operations. Nearly 1/3 of that cash flow has been invested in the business through capital projects and acquisitive growth. Approximately 10% has been allocated to repay debt and build a cash buffer. And more than 50% or nearly $4.5 billion has been returned to shareholders through share buybacks and dividends.

暫時堅持細節。自 2016 年以來，這段時期經歷了上升和下降週期，我們從運營中產生了超過 85 億美元的現金。近 1/3 的現金流已通過資本項目和收購增長投資於業務。大約 10% 已分配用於償還債務和建立現金緩衝。超過 50% 或近 45 億美元已通過股票回購和股息返還給股東。

Slide 9 provides a snapshot of a few of our key balance sheet and liquidity metrics, further highlighting the success of our patient and balanced approach with capital. Note, West Fraser is rated investment grade by 3 key ratings agencies. We also continue to have strong liquidity with combined cash and bank lines approaching $2 billion. And our debt ratios remain well within the balance of our lending covenants.

幻燈片 9 提供了我們的一些關鍵資產負債表和流動性指標的快照，進一步強調了我們耐心和平衡的資本方法的成功。請注意，West Fraser 被 3 家主要評級機構評為投資級別。我們還繼續擁有強勁的流動性，現金和銀行額度合計接近 20 億美元。我們的債務比率仍然很好地保持在我們貸款契約的平衡範圍內。

As we look ahead, West Fraser remains committed to investing in the business and we have reiterated guidance of $500 million to $600 million of capital expenditures in 2023, including an estimated $100 million that we plan to spend on the sawmill modernization in Henderson, Texas.

展望未來，West Fraser 仍致力於投資該業務，我們重申了 2023 年 5 億至 6 億美元的資本支出指導方針，其中包括我們計劃用於德克薩斯州亨德森鋸木廠現代化改造的估計 1 億美元。

With that overview, I will now pass the call over to Ray.

有了這個概述，我現在將把電話轉給雷。

Thanks, Chris. As mentioned, in Q1 2023, we experienced soft demand, particularly in North America as the rapid increase in mortgage rates in 2022 continued to have an impact on overall consumption.

謝謝，克里斯。如前所述，在 2023 年第一季度，我們經歷了需求疲軟，尤其是在北美，因為 2022 年抵押貸款利率的快速上升繼續對整體消費產生影響。

I will note that as the first quarter unfolded, we did see many of our production costs come down and the trajectory of our demand improve. This demand improvement was particularly true for our U.S. South Lumber and OSB segments, which allowed us to return to a more normalized operating environments when compared to the significant production downtime we took in the fourth quarter.

我會注意到，隨著第一季度的展開，我們確實看到我們的許多生產成本下降了，我們的需求軌跡也有所改善。這種需求改善對於我們的美國南部木材和定向刨花板部門尤其如此，與第四季度的重大生產停機時間相比，這使我們能夠恢復到更加正常化的運營環境。

In Western Canada, and specifically in BC, where we have an integrated operating strategy, our business decisions can be more complex as we evaluate profitability in the aggregate across our lumber, pulp, plywood and panels segment, while also trying to balance short-term decisions with the long-term considerations of preserving key aspects of our manufacturing, fiber procurement and staff ecosystems.

在加拿大西部，特別是在我們擁有綜合運營戰略的不列顛哥倫比亞省，我們的業務決策可能會更加複雜，因為我們評估了木材、紙漿、膠合板和麵板部門的總體盈利能力，同時還試圖平衡短期長期考慮保留我們的製造、纖維採購和員工生態系統的關鍵方面的決定。

As a result, our overall BC business in the aggregate was profitable in the first quarter due to our downstream integration, as mentioned with MDF, plywood and pulp.

因此，由於我們的下游整合，如中密度纖維板、膠合板和紙漿，我們的整體 BC 業務在第一季度總體上實現了盈利。

In terms of our more important longer-term strategy, while the first quarter SPF production was flat to slightly up in Q4, the historic downward trend in our BC production has been -- (technical difficulty) From 2018 through 2022, our West Fraser BC lumber production declined by more than 40%, representing a reduction of nearly 1 billion board feet through that period, reflecting our continued adjustment to available economic fiber and customer demand.

就我們更重要的長期戰略而言，雖然第一季度 SPF 產量持平到第四季度略有上升，但我們 BC 產量的歷史下降趨勢是——（技術困難）從 2018 年到 2022 年，我們的 West Fraser BC木材產量下降了 40% 以上，這意味著在此期間減少了近 10 億板英尺，反映了我們對可用經濟纖維和客戶需求的持續調整。

With ongoing government policies such as old growth deferrals, species at risk and other potential further reductions due to policy, we expect annual allowable cuts to continue to be constrained. We reiterate our optimism about our U.S. growth strategy for the long-term aspects and prospects for our lumber business.

隨著政府的持續政策，如舊的增長延期、瀕危物種和其他可能因政策而進一步減少，我們預計年度允許削減將繼續受到限制。我們重申我們對美國木材業務的長期方面和前景的增長戰略持樂觀態度。

With respect to outlook, the wood building products industry may continue to face challenges ranging from further rate hikes by central banks, ongoing labor constraints and the potential for muted product demand due to the apparent constraints that consumers face with regard to housing affordability, at least in the short term.

就前景而言，木材建築產品行業可能繼續面臨各種挑戰，包括央行進一步加息、持續的勞動力限制以及由於消費者在住房負擔能力方面面臨的明顯限製而導致的產品需求可能減弱，至少在短期內。

That said, inflationary cost pressures have moderated across much of our supply chain for the raw materials such as energy, resins, chemicals and fiber. And we believe this trend will continue through the remainder of 2023.

也就是說，通貨膨脹成本壓力在我們大部分供應鏈的原材料（如能源、樹脂、化學品和纖維）中已經緩和。我們相信這一趨勢將持續到 2023 年剩餘時間。

On the demand front, we are seeing some positive signs in the spring building season, much to do with the public homebuilder commentary that is in the marketplace and the upward trend in mortgage rates that we experienced much of last year appears to be slowing or easing. Both of these factors are helpful for driving new home construction and consumption of our wood building product business -- products.

在需求方面，我們在春季建築季節看到了一些積極跡象，這與市場上的公共房屋建築商評論以及我們去年大部分時間經歷的抵押貸款利率上升趨勢似乎正在放緩或緩和有很大關係.這兩個因素都有助於推動新房建設和我們木建築產品業務——產品的消費。

In closing, while near-term uncertainties exist across the industry and our business, we remain confident in the foundation we have built. We have been through these cycles before and is not by accident that we have the talent, assets and the financial flexibility to position us well to handle both the challenges and the opportunities that lie ahead. We have been disciplined in our approach to capital allocation and have preserved capital in the event that we have a down market like the one we are currently experiencing.

最後，儘管整個行業和我們的業務在短期內都存在不確定性，但我們仍然對我們已經建立的基礎充滿信心。我們以前經歷過這些週期，我們擁有人才、資產和財務靈活性，可以很好地應對未來的挑戰和機遇，這並非偶然。我們在資本分配方法上一直受到紀律約束，並在我們遇到像我們目前所經歷的市場低迷的情況下保留了資本。

As this discipline has positioned us to be able to execute on our strategy to invest and improve our assets through all market conditions as well as be ready to take advantage of growth opportunities, if and when they arise. As we look ahead, we will continue to focus on our core strengths of being low cost, remain true to our capital allocation strategy and we look forward to a future with a growth in demand for the types of sustainable, renewable wood products for which West Fraser is known.

由於這一紀律使我們能夠執行我們的戰略，在所有市場條件下投資和改善我們的資產，並準備好在增長機會出現時利用它們。展望未來，我們將繼續專注於我們的低成本核心優勢，堅持我們的資本配置戰略，我們期待未來對 West 提供的可持續、可再生木材產品類型的需求增長弗雷澤是眾所周知的。

With that, I'll turn the call back to the operator and we'll take Q&A. Thank you.

有了這個，我會把電話轉回接線員，我們將進行問答。謝謝。

(Operator Instructions) Your first question comes from Ketan Mamtora from BMO.

（操作員說明）您的第一個問題來自 BMO 的 Ketan Mamtora。

First question, I was hoping you can provide some additional color around timing of Allendale restart. I noticed that the release from last evening still says that it's a potential restart. Are there any indicators that you are watching or we should be watching that could have an impact on when the mill would start up? I know you've talked about potential at the end of sort of Q2?

第一個問題，我希望你能提供一些關於 Allendale 重啟時間的額外顏色。我注意到昨晚的發布仍然說這是一個潛在的重啟。是否有任何您正在觀察或我們應該觀察的指標可能會對工廠何時啟動產生影響？我知道你在第二季度末談到過潛力？

Ketan, thanks for that. So yes, our past guidance on that, I think, remains unchanged. We're quite pleased with the progress that the team has made there. And we expect to start, as we talked about and I think what we've said is, really at the end of Q2, early Q3 is kind of -- we're still on that same time frame.

科坦，謝謝你。所以是的，我認為我們過去對此的指導保持不變。我們對團隊在那裡取得的進展感到非常滿意。正如我們所討論的那樣，我們希望開始，我認為我們所說的是，實際上是在第二季度末，第三季度初——我們仍然處於同一時間框架內。

Understood. Okay. Now, that's helpful. And then switching to capital allocation. You guys renewed the NCIB late February but haven't repurchased any shares since then. Was there any kind of blackout periods or anything else that we should be thinking about in terms of why you didn't repurchase shares?

明白了。好的。現在，這很有幫助。然後轉向資本配置。你們在 2 月下旬更新了 NCIB，但此後沒有回購任何股票。就您為什麼不回購股票而言，是否存在任何類型的停電期或我們應該考慮的其他任何事情？

Thanks for the question, Ketan. Look, I think as we think about it, that program lasts for 12 months. And what we're able to uptake in the program this year is somewhat smaller in terms of share count than it's been historically just because we reduced the share count so much in the last couple of years. And so we'll look for those opportunities to step in when it makes sense for us. We consider all kinds of things, the macro backdrop, our liquidity, how things are trading. And so we've been quite disciplined, I think about how we execute that NCIB over the last couple of years and will continue to do so and the pace of those purchases can ebb and flow during the year.

謝謝你的問題，科坦。聽著，我認為，正如我們所考慮的那樣，該計劃將持續 12 個月。今年我們能夠在該計劃中吸收的份額數量比歷史上少一些，因為我們在過去幾年中減少瞭如此多的份額數量。因此，我們會尋找那些對我們有意義的機會介入。我們考慮各種各樣的事情，宏觀背景，我們的流動性，事情的交易方式。因此，我們一直非常自律，我考慮了過去幾年我們如何執行 NCIB，並將繼續這樣做，這些購買的步伐在這一年中可能會起伏不定。

The renewal was at the end of February. So really not that much time has passed since we renewed it at the end of February. So I think that's about all we can -- we would say about that.

更新是在二月底。所以自從我們在 2 月底更新它以來，實際上並沒有過去多少時間。所以我認為這就是我們所能做的——我們會這麼說。

Got it. No, that's helpful perspective. Chris, and just final question before I turn it over. The 2023 CapEx, Chris, can you talk a little bit about what flexibility you have to either dial up or dial down depending on market conditions? And let's say, if back half of the year turns out to be kind of softer, what flexibility do you have there?

知道了。不，這是有用的觀點。克里斯，在我把它翻過來之前，最後一個問題。 2023 年的資本支出，克里斯，你能談談根據市場情況你有什麼靈活性可以調高或調低嗎？比方說，如果今年後半年變得有點軟，你有什麼靈活性？

Well, Chris and I are looking at each other, deciding who's going to answer this one. So -- and Chris can jump in here. Look, I think we have tremendous flexibility to go up or down based on our balance sheet and the capability of the company. But -- so we always -- and I think we've demonstrated in the past that we can dial that up or dial that down, based on what we think is in the best interest of everyone. But look, at this point, we're full steam ahead and pushing to execute on all of our capital program.

好吧，克里斯和我正在看著對方，決定誰來回答這個問題。所以——Chris 可以加入進來。看，我認為我們有很大的靈活性，可以根據我們的資產負債表和公司的能力來上漲或下跌。但是——我們總是——而且我認為我們在過去已經證明，我們可以根據我們認為最符合每個人利益的方式來調高或調低它。但是看，在這一點上，我們正在全速前進並推動執行我們所有的資本計劃。

We see these periods as the opportunity to get ourselves in good position to be ready for a turnaround. So it's -- at this point, it's full steam ahead.

我們將這些時期視為讓自己處於有利位置為轉機做好準備的機會。所以它 - 在這一點上，它正在全速前進。

Yes, I think what we've said consistently over the last couple of years, as we've managed the allocation of the capital and those outsized amounts of capital that were generated in the last couple of years is, we're going to be patient and thoughtful about this because we know that these market conditions won't last forever. And we don't want to be having to be, in there facing a decision that we got to -- because of market conditions, we got to turn down high-return capital. We'd actually just assume we'd be doing some of that capital in weak markets and preparing for when things turn around, which they eventually will. So I think the spend this year is really a reflection of -- we got a lot of projects that we're quite excited to do. And we preserved the balance sheet over the last 2 years despite all the share buybacks and the activity that we've done. We've preserved the balance sheet and liquidity that we don't have to cut CapEx. We can continue to execute our strategy in good markets and in bad.

是的，我認為我們在過去幾年一直在說，因為我們已經管理了資本的分配以及過去幾年產生的大量資本，我們將成為對此要有耐心和深思熟慮，因為我們知道這些市場條件不會永遠持續下去。我們不想不得不面對我們必須做出的決定——由於市場條件，我們必須拒絕高回報資本。我們實際上只是假設我們會在疲軟的市場中進行一些投資，並為情況好轉做準備，他們最終會。所以我認為今年的支出確實反映了——我們有很多我們很高興能做的項目。儘管進行了所有股票回購和我們所做的活動，但我們在過去兩年中保留了資產負債表。我們保留了資產負債表和流動性，我們不必削減資本支出。我們可以在好的市場和壞的市場中繼續執行我們的戰略。

Your next question comes from Hamir Patel from CIBC Capital Markets.

您的下一個問題來自 CIBC Capital Markets 的 Hamir Patel。

Ray, I was wondering if you got -- you have any thoughts as to what's driving the large premium we're seeing for Southern Yellow Pine to SPF?

雷，我想知道你是否有任何想法，是什麼推動了我們看到的南黃鬆對 SPF 的巨大溢價？

Well, Hamir and look, I ask the same question. I can give you what our best guesses are. And I think we'll be smarter as the next quarter unwinds. And so look, I think it's been a surprise to us to see this gap. I suspect it's a surprise to many. And our views are kind of this. I think, look, obviously, it's been -- it's -- we see a bit of a slowdown on demand. And so the first one that we look at is that when you look at the robustness of the SYP, we really believe there's been a bit of product substitution because of the supply chain, which is, people aren't really interested in taking risk on inventories. The supply chain from our -- at least from our view, appears very lean and that SYP is quite prompt and can get to the market very quickly, much more quicker than what we can ship it into the U.S. And we think that's one aspect.

好吧，哈米爾，你看，我問了同樣的問題。我可以告訴你我們最好的猜測是什麼。而且我認為隨著下個季度的結束，我們會變得更聰明。所以看，我認為看到這個差距讓我們感到驚訝。我想這會讓很多人感到驚訝。我們的觀點是這樣的。我認為，很明顯，我們看到需求有所放緩。因此，我們看到的第一個是，當您查看 SYP 的穩健性時，我們真的相信由於供應鏈而存在一些產品替代，也就是說，人們對承擔風險並不真正感興趣庫存。我們的供應鏈——至少從我們的觀點來看，看起來非常精簡，SYP 非常迅速，可以非常迅速地進入市場，比我們將其運往美國的速度快得多。我們認為這是一方面。

Look, I think it's also been a bit of a surprise to see European imports coming into the level that they have. I guess we'll see how much (inaudible) that has. I think -- I would expect, rather surprised with how low SPF has gone. But -- so there's been a bit of an offset seeing European imports come in to the level that they have, at least in the -- early in the year.

看，我認為看到歐洲進口達到他們現在的水平也有點令人驚訝。我想我們會看看有多少（聽不清）。我想——我會預料到，SPF 的降低程度讓我感到相當驚訝。但是——所以看到歐洲進口達到他們所擁有的水平，至少在今年年初，這有點抵消了。

And then the third part is, I think there's been -- you see a lot of these announcements that come out of British Columbia. And it's a significant volume, both temporary and permanent that's been announced and for the stuff that probably wasn't announced, and that's a big number. But the market doesn't see the impact of those curtailments until really now or in the next month or 2. And so that volume of wood has continued to flow. But as we get into the end of this -- well, really over the next month or 2, we expect to see that supply constraint in SPF kind of at least out of Canada hit the ground.

然後第三部分是，我認為已經 - 你看到了很多來自不列顛哥倫比亞省的公告。這是一個很大的數量，包括已經宣布的臨時和永久的，以及可能沒有宣布的東西，這是一個很大的數字。但市場直到現在或下個月或兩個月才真正看到這些削減的影響。因此，木材量繼續流動。但是當我們接近尾聲時——好吧，真的在接下來的一兩個月裡，我們預計 SPF 的供應限制至少會在加拿大以外的地方出現。

So those are the 3 things that we look at. Now we are starting to see that gap moderate because it was -- I think it was around -- probably around [200] at 1 time and certainly come off from that. But I'd -- our thoughts would be that it's a temporary dislocation and you can expect over time for that to correct.

所以這些是我們要看的三件事。現在我們開始看到這個差距是溫和的，因為它 - 我認為它大約 - 可能在 1 次左右 [200] 並且肯定會從中消失。但我——我們的想法是，這是一個暫時的錯位，你可以期待隨著時間的推移，它會得到糾正。

Okay. That's helpful. And then kind of sticking with BC, it seems like there's a lot of pulp downtime coming throughout Western Canada, just given the decline in pulp prices. Do you think that's going to further weigh on costs for the BC industry? I'm just thinking if there's risk that chip prices fall materially here.

好的。這很有幫助。然後有點堅持不列顛哥倫比亞省，似乎整個加拿大西部都有很多紙漿停工時間，只是考慮到紙漿價格的下跌。您認為這會進一步影響 BC 行業的成本嗎？我只是在想這裡是否存在芯片價格大幅下跌的風險。

Well, Hamir, I think in BC and I can only speak for us, I mean, we've announced our Cariboo curtailments. That's primarily as a result of not being able to find enough fiber, quite frankly, somewhat because of all the sawmill curtailments that have occurred. So I see -- look, there's obviously a cost impact depending on where people are sourcing fiber and how far are you willing to go to do that. And I think we've made -- obviously, we've made decisions around that. But I think it's less about cost, it's more about fiber availability at this point.

好吧，哈米爾，我想在 BC，我只能代表我們說話，我的意思是，我們已經宣布了我們的 Cariboo 削減計劃。這主要是由於無法找到足夠的纖維，坦率地說，這在一定程度上是因為所有鋸木廠都發生了縮減。所以我明白了——看，這顯然會產生成本影響，這取決於人們在哪裡採購光纖以及您願意為此付出多遠。而且我認為我們已經做出 - 顯然，我們已經圍繞這一點做出了決定。但我認為這與成本無關，更多的是在這一點上光纖的可用性。

Great. And just the last question I had on the OSB side, where we're seeing more idle capacity being converted or planned to be converted to siding in coming years. Do you see any opportunities for West Fraser to participate in growth in that siding market?

偉大的。我在 OSB 方面提出的最後一個問題是，我們看到更多的閒置產能正在轉換或計劃在未來幾年轉換為壁板。您認為 West Fraser 有參與該壁板市場增長的任何機會嗎？

Well, first of all, so I'd like to kind of just -- on the idle capacity, I think we're pretty excited about our Allendale facility and the position that we're in and our startup and where we think we're going to be on the cost curve and our strategy. On other products, I would say, we like our product strategy and -- but look, we're always looking to find ways of growing our customer portfolio.

好吧，首先，所以我想說一下 - 關於閒置產能，我認為我們對我們的 Allendale 設施以及我們所處的位置以及我們的初創公司以及我們認為我們的位置感到非常興奮'我們將關注成本曲線和我們的戰略。在其他產品上，我會說，我們喜歡我們的產品戰略——但是看，我們一直在尋找增加客戶組合的方法。

So with respect to siding, I can't comment on that. I mean, there's companies out there that do a pretty good job at that. And -- so -- but we're pretty comfortable with where we are with our strategy to date on OSB.

所以關於壁板，我不能對此發表評論。我的意思是，有些公司在這方面做得很好。而且——所以——但我們對我們迄今為止在 OSB 上的戰略所處的位置感到非常滿意。

Your next question comes from Sean Steuart from TD Securities.

您的下一個問題來自道明證券的 Sean Steuart。

First question on the balance sheet. You touched on the ample liquidity position you have but you are churning through it through this extended trough. Just wondering, Ray or Chris, if you can speak to your appetite for leverage on the balance sheet, updated thoughts on that front and how potential M&A ambitions factor into that outlook for the company?

資產負債表上的第一個問題。你談到了你擁有的充足流動性頭寸，但你正在通過這個延長的低谷來攪動它。只是想知道，雷或克里斯，如果你能談談你對資產負債表槓桿的興趣，在這方面的最新想法以及潛在的併購雄心如何影響公司的前景？

Sure. So I think what we got to keep in mind about the first quarter, Sean, is that, that consumption of cash and liquidity in the first quarter is really around the working capital build and the log decks, right? So probably $200 million of that consumption was around that seasonal inventory build and that typically unwinds in the second and into the third quarter.

當然。所以我認為關於第一季度，肖恩，我們要記住的是，第一季度的現金和流動性消耗實際上是圍繞營運資本建設和日誌平台，對吧？因此，可能有 2 億美元的消費是圍繞季節性庫存建立的，通常會在第二季度和第三季度解除。

So probably some of that, a good portion of it gets clawed back here over the next couple of quarters. So we're pretty comfortable with where we think liquidity is going to end at the end of the year even in a fairly conservative outlook for the market. So I don't think the addition of leverage for us is a real pressing issue right now that we got to go out and secure leverage because of tightness of liquidity.

所以可能其中一些，其中很大一部分在接下來的幾個季度裡會被收回。因此，即使在相當保守的市場前景下，我們對我們認為流動性將在年底結束的地方感到非常滿意。因此，我認為現在增加槓桿對我們來說並不是一個真正緊迫的問題，因為流動性緊張，我們必須走出去並確保槓桿。

In respect of capacity, what I would say is we're carrying the same debt level that we carried prior to Norbord at USD 500 million with a substantially larger company that's more diversified across products and geography. So we operated at that $500 million number in a much smaller and much different environment. And so if the right opportunities are out there for us to continue to improve the company, I'm confident we'll find a way to finance those things the right way.

在能力方面，我要說的是，我們的債務水平與 Norbord 之前的債務水平相同，為 5 億美元，而這家公司規模更大，產品和地域更加多元化。因此，我們在一個更小、更不同的環境中以 5 億美元的規模運營。因此，如果有合適的機會讓我們繼續改進公司，我相信我們會找到一種方法來以正確的方式為這些事情提供資金。

Yes. I was more -- I'm not worried about you guys hitting any liquidity wall but trying to gauge the scale of the M&A opportunity you might look at vis-a-vis your current liquidity position, but I think I have a sense of that. One follow-up question on Allendale. As you think about the restart here in the coming months and I appreciate this is going to be an extended ramp. But I believe one of the issues with that asset historically in that part of the site is acute labor constraints. How have things trended with respect to that variable and you're comfortable that the staffing is there as needed for an extended ramp-up for that asset?

是的。我更多的是——我不擔心你們會遇到任何流動性壁壘，而是試圖衡量你們可能會看到的併購機會的規模，相對於你們目前的流動性狀況，但我想我有一種感覺.關於 Allendale 的一個後續問題。當你考慮未來幾個月在這裡重新啟動時，我很欣賞這將是一個擴展的斜坡。但我認為該站點的那部分歷史上與該資產有關的問題之一是嚴重的勞動力限制。關於該變量的趨勢如何，您是否滿意該資產的擴展擴展所需的人員配置？

Well, Sean, thanks. So I think we've got about 85 people on site, something like that right now and it might be a little bit more than that. That, Sean, actually is better than we expected. And I can only take my hat off to the team that's worked extremely hard in the last year to get it to that stage.

好吧，肖恩，謝謝。所以我認為我們現場大約有 85 人，現在差不多，而且可能會更多。肖恩，這實際上比我們預期的要好。我只能向在去年非常努力工作以達到那個階段的團隊脫帽致敬。

So if you'd asked me a year ago, I would have been cautious on my comment. I think we're -- we got a lot more confidence today than we did a year ago. And so we're seeing that as a much lower risk than we would have a year ago. But look, it remains throughout North America and particularly the U.S. South. Skilled and unskilled labor is constrained and you need to work hard to ensure that people want to come work for you and stay for the long term.

所以如果你一年前問我，我會對我的評論持謹慎態度。我認為我們 - 我們今天比一年前更有信心。因此，我們認為這比一年前的風險要低得多。但是看，它仍然存在於整個北美，尤其是美國南部。熟練和非熟練勞動力受到限制，您需要努力工作以確保人們願意為您工作並長期留下來。

So that remains a challenge. And at this point, I wouldn't put Allendale at a different risk than any one of our other U.S. South assets, quite frankly.

所以這仍然是一個挑戰。坦率地說，在這一點上，我不會讓 Allendale 面臨與我們其他美國南部資產不同的風險。

Your next question comes from Andrew Kuske from Credit Suisse.

你的下一個問題來自瑞士信貸的 Andrew Kuske。

I guess maybe a broad question but it comes back to the balance sheet. You've got ample flexibility despite the market environment we're in right now. And you've mentioned mass timber in the past as really being a driver of wood products demand. To what degree or what extent do you find that market just interesting fundamentally given the growth potential for you to be actually being involved in end market mass timber?

我想這可能是一個廣泛的問題，但它又回到了資產負債表上。儘管我們現在所處的市場環境如此，但您仍然擁有足夠的靈活性。您過去曾提到大量木材確實是木製品需求的驅動力。考慮到您實際參與終端市場大量木材的增長潛力，您在多大程度上或多大程度上發現該市場從根本上很有趣？

Well, Andrew and so I'll just put it in context. So West Fraser, with really the softwood lumber board for the last dozen years has played a major role in developing those markets in North America. So there's been millions of dollars, which we've been a big part of that going into creating that opportunity. So we're excited by -- and I think mass timber is one example of the growing wood product demand because of its sustainability and ESG qualities and characteristics. So that said, I mean, that's why we talk about it.

好吧，安德魯，所以我只是把它放在上下文中。所以 West Fraser，在過去的十幾年裡，實際上是軟木板材，在開發北美這些市場方面發揮了重要作用。因此，已經有數百萬美元，我們在創造這個機會方面發揮了重要作用。所以我們很興奮——我認為大量木材是木製品需求不斷增長的一個例子，因為它具有可持續性和 ESG 質量和特徵。所以說，我的意思是，這就是我們談論它的原因。

You look at the growth of mass timber in the last few years and it's exploding. We're very supportive of that industry. And we see ourselves as someone that wants to supply those -- the CLT manufacturing business. And whether we do or we don't, it's another area of -- example of growing demand. So I think that's the context of what I would say is, now look, I think depending on who you talk to, how big will mass timber be, our eyes are still focused on -- I think if it's wildly successful, it's going to be somewhere -- and this, really comes from [SLB or FEA] or others. But you're looking at somewhere between 3% and 10% of the overall market. So we'll see. It's still early stages but we just think it's an example of wood products demand that didn't exist 10 years ago, when we started thinking about where the future constraints are going to be on supply and demand.

你看看過去幾年大量木材的增長，它正在爆炸式增長。我們非常支持這個行業。我們將自己視為想要提供這些的人——CLT 製造業務。無論我們做還是不做，這都是另一個領域——需求增長的例子。所以我認為這就是我要說的背景，現在看，我認為取決於你與誰交談，大量木材將有多大，我們的目光仍然集中在——我認為如果它取得巨大成功，它將會在某個地方——這真的來自 [SLB 或 FEA] 或其他人。但你看到的是整個市場的 3% 到 10% 之間的某個地方。所以我們拭目以待。它仍處於早期階段，但我們只是認為這是 10 年前不存在的木製品需求的一個例子，當時我們開始考慮未來的供需限制在哪裡。

That's helpful. So maybe just for an additional point of clarity. So on the CLT, not saying, noted that industry, but it's just sort of early right now, it's stimulative for your core business. But it could be an interesting opportunity longer term, should it become bigger?

這很有幫助。所以也許只是為了更清楚一點。所以在 CLT 上，沒有說，注意到那個行業，但現在還為時過早，它對你的核心業務有促進作用。但從長遠來看，這可能是一個有趣的機會，它應該變得更大嗎？

I think that's fair, Andrew. Sure.

我認為這很公平，安德魯。當然。

(Operator Instructions) Your next question comes from Paul Quinn from RBC Capital Markets.

（操作員說明）您的下一個問題來自 RBC 資本市場的 Paul Quinn。

Challenging quarter. Just wondering if European OSB prices have stabilized here? Or what's the expectation for the balance of the year?

具有挑戰性的季度。只是想知道歐洲 OSB 價格是否已經穩定？或者對今年餘額的預期是什麼？

Well, what I would say is that energy costs have come down. And so that's helped kind of offset little bit around fiber. And the market everywhere, including Europe is still choppy but it's held up better than what we had expected, Paul. I think that's -- as far as -- so it's hard for me to forecast what this is going to look like over the next few quarters. But I would just say, when we look backwards in the last couple, it's held up better than we expected. And I guess we'll see what the balance of the year looks like. But yes, I think that would be all I can say on that.

好吧，我想說的是能源成本已經下降。因此，這有助於抵消光纖的影響。保羅，包括歐洲在內的各地市場仍然起伏不定，但比我們預期的要好。我認為，就目前而言，我很難預測未來幾個季度的情況。但我只想說，當我們回顧過去的幾對時，它的表現比我們預期的要好。我想我們會看到今年的餘額情況。但是，是的，我想我能說的就這些了。

Okay. And then I'm looking for a sort of update on softwood lumber. I know the industry was trying to get that on the agenda when Trudeau sat down with Biden. Where are we at on that and where we are on the -- just sort of trade, WTO, NAFTA processes as well.

好的。然後我正在尋找一種關於軟木木材的更新。我知道當特魯多與拜登坐下來時，業界正試圖將其提上議程。我們在這方面的進展情況以及我們在貿易、世貿組織、北美自由貿易協定進程方面的進展情況。

So look, the WTO and litigation and trade processes, I mean, we need 5 experts to get in and unpack that. It's just incredibly complicated. But what I would say is, we're disappointed that it really didn't become something that our political leaders really want to take forward. And so I'll just leave that at that. There really isn't very much going on around -- so really, it just continues to go along on the -- on really managing through the administrative review process on an annual basis today. And so I mean -- and you've seen the disclosure in our statements. That describes it better than I ever will. But from a negotiation standpoint, there's not anything much going on that I'm aware of. And I don't have a strong view that it will get resolved anytime in the near future.

所以看，WTO 以及訴訟和貿易流程，我的意思是，我們需要 5 位專家來參與並解包。這非常複雜。但我要說的是，我們很失望它真的沒有成為我們的政治領導人真正想要推進的事情。所以我就把它留在那裡。真的沒有太多事情發生——所以真的，它只是繼續進行——今天每年通過行政審查流程進行真正的管理。所以我的意思是——你已經在我們的聲明中看到了披露。這比我以往任何時候都更好地描述了它。但從談判的角度來看，我所知道的事情並不多。而且我不認為它會在不久的將來隨時得到解決。

Okay. And then just lastly, just looking at the -- your M&A opportunities here. What do you see in the marketplace right now? Or are you guys getting more realistic on pricing given the drop in overall commodity prices?

好的。最後，只是看看——你在這裡的併購機會。你現在在市場上看到了什麼？或者，鑑於整體商品價格下跌，你們在定價方面是否變得更加現實？

Yes. Thanks, Paul. So if I just reflect on the last few periods, I mean, look, there continues to be opportunities out there to do things. I think our view is, we're going to focus on quality and on things that we think we can execute and achieve meaningful synergies and kind of have an opportunity to be in that kind of those first and second quartile type of things. So I would just say we continue to say no a lot rather than yes. So I would say I think it has been active and I'd say it remains to be active. I think when it comes to value, look, I think everyone or just say many have the same view on the future that we do and that they're bullish. And I would say expectations probably remain and that -- so I guess, if they're stressed assets, that's something different. But I think most people are in pretty good shape and have -- I can't speak for others but I would say -- experience would say people have a bullish outlook on the mid- to longer term.

是的。謝謝，保羅。因此，如果我只是反思過去幾個時期，我的意思是，看，繼續有機會做事。我認為我們的觀點是，我們將專注於質量和我們認為我們可以執行並實現有意義的協同作用的事情，並且有機會參與那些第一和第二四分位數類型的事情。所以我只想說我們繼續說“不”而不是“是”。所以我會說我認為它一直很活躍，我會說它仍然很活躍。我認為當談到價值時，看，我認為每個人或只是說許多人對我們所做的未來有相同的看法並且他們看好。而且我會說期望可能仍然存在 - 所以我想，如果他們是壓力資產，那是不同的。但我認為大多數人的狀況都很好，而且——我不能代表其他人，但我會說——經驗表明人們對中長期前景持樂觀態度。

Presenters, there are no further questions at this time. Please proceed with your closing remarks.

主持人，目前沒有其他問題。請繼續您的結束語。

Well, listen, thanks, everyone, for tuning in today and will look forward to talking to you at the end of Q2. Thank you.

好吧，聽著，謝謝大家今天的收看，期待在第二季度末與您交談。謝謝。

Ladies and gentlemen, this concludes your conference call for today. We thank you for joining and you may now disconnect your lines.

女士們，先生們，今天的電話會議到此結束。我們感謝您的加入，您現在可以斷開您的線路。