| Investors, analysts and other interested parties may access Acadian Timber Corp.’s 2024 Fourth Quarter Results conference call and webcast on Thursday, February 13, 2025 at 1:00PM ET. Please register here or follow the link on our website at www.acadiantimber.com/presentations-webcasts, to receive your unique PIN. For those unable to participate, a recorded rebroadcast will be available until 4:00PM ET February 13, 2026. |
EDMUNDSTON, New Brunswick, Feb. 12, 2025 (GLOBE NEWSWIRE) — Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today reported financial and operating results1 for the three months ended December 31, 2024 (the “fourth quarter”) as well as for the full 2024 fiscal year.
“We achieved steady results from our timber operations in the face of weakened end use markets and our financial results received a significant boost from our first significant sale of voluntary carbon credits during 2024,” said Adam Sheparski, President and Chief Executive Officer. “We have started 2025 with the establishment of our own harvesting operation in Maine to address the persistent issue of contractor availability, and we look forward to a productive winter season.”
Acadian generated sales of $116.2 million, compared to $93.5 million in the prior year. The sale of 752,100 voluntary carbon credits contributed $24.6 million to total sales in 2024. Acadian generated $29.7 million of Free Cash Flow during the year, compared to $15.0 million in 2023, and declared dividends of $20.3 million or $1.16 per share to our shareholders. Acadian’s balance sheet remains solid with $29.3 million of net liquidity as at December 31, 2024, which includes funds available under our credit facilities.
Internal Harvesting Operations
With the goal of expanding harvesting capacity in Maine and reducing operating costs, Acadian has established its own internal harvesting operation. In January 2025, subsequent to year end, Acadian purchased several pieces of harvesting equipment and hired equipment operators, who have begun harvesting on Acadian’s Maine timberlands.
On February 10, 2025, Acadian signed an agreement to purchase certain logging and related assets of A & A Brochu, LLC (“A & A Brochu”) and its affiliates for a total price of U.S.$4.8 million to further expand its internal harvesting operations. The assets include harvesting, trucking and road working equipment and related real estate which, combined with an established workforce, constitute a portion of A & A Brochu’s logging operation in Maine. A & A Brochu has provided contractor services to Acadian for many years. The transaction is expected to close in the second quarter of 2025.
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| 1 | This news release makes reference to “Adjusted EBITDA”, which Acadian’s management defines as net income before interest, income taxes, fair value adjustments, non-cash cost of sales related to carbon credits, recovery of or impairment of land and roads and depreciation and amortization, and to “Adjusted EBITDA margin”, which is Adjusted EBITDA as a percentage of sales. Reference is also made to “Free Cash Flow”, which Acadian’s management defines as Adjusted EBITDA less interest paid, current income tax expense, and capital expenditures excluding acquisitions of timberlands, plus net proceeds from the sale of timberlands and other fixed assets (proceeds less gains or losses). Reference made to “Payout Ratio” is defined as dividends declared divided by Free Cash Flow and “Payout Ratio with DRIP” is defined as dividends paid in cash divided by Free Cash Flow. Management believes that Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, and Payout Ratios are key performance measures in evaluating Acadian’s operations and are important in enhancing investors’ understanding of the Company’s operating performance. Adjusted EBITDA and Adjusted EBITDA margin are indicative of the underlying profitability of Acadian’s operating segments and are used to evaluate operational performance. Free Cash Flow is used to evaluate Acadian’s ability to generate sustainable cash flows from our operations that are available for dividends, repurchases of common shares, debt reduction, acquisitions, and other capital allocation activities. Payout Ratios are used to evaluate Acadian’s ability to fund its distribution using Free Cash Flow. Please refer to the section entitled “Non-IFRS Measures” in Management’s Discussion and Analysis for further details. |
Review of Operations
Financial and Operating Highlights
| Three Months Ended | Year Ended | ||||||||||||||
| (CAD thousands, except volume and per share information) | December 31,
2024 |
December 31,
2023 |
December 31,
2024 |
December 31,
2023 |
|||||||||||
| Timber sales volume (000s m3) | 232.3 | 231.9 | 977.2 | 894.2 | |||||||||||
| Carbon credit sales volume (000s credits) | – | 1.5 | 752.1 | 1.5 | |||||||||||
| Timber sales and services | $ | 20,226 | $ | 23,778 | $ | 91,597 | $ | 93,440 | |||||||
| Carbon credit sales | – | 37 | 24,588 | 37 | |||||||||||
| Operating income | 3,215 | 4,312 | 23,659 | 19,566 | |||||||||||
| Net income | 5,585 | 11,593 | 21,738 | 29,434 | |||||||||||
| Adjusted EBITDA | $ | 3,698 | $ | 4,418 | $ | 38,893 | $ | 20,586 | |||||||
| Adjusted EBITDA margin | 18 | % | 19 | % | 33 | % | 22 | % | |||||||
| Free Cash Flow | $ | 3,051 | $ | 2,811 | $ | 29,733 | $ | 14,999 | |||||||
| Dividends declared | 5,126 | 4,983 | 20,259 | 19,802 | |||||||||||
| Dividends paid in cash | 2,588 | 3,702 | 11,488 | 14,868 | |||||||||||
| Payout Ratio | 168 | % | 177 | % | 68 | % | 132 | % | |||||||
| Payout Ratio with DRIP | 85 | % | 132 | % | 39 | % | 99 | % | |||||||
| Per share – basic and diluted | |||||||||||||||
| Net income | $ | 0.32 | $ | 0.68 | $ | 1.24 | $ | 1.72 | |||||||
| Free Cash Flow | 0.17 | 0.16 | 1.69 | 0.88 | |||||||||||
| Dividends declared | 0.29 | 0.29 | 1.16 | 1.16 | |||||||||||
Three Months Ended December 31, 2024
During the fourth quarter, Acadian generated sales of $20.3 million compared to $23.8 million in the prior year period. Sales volume, excluding biomass, were consistent with the same period of 2023. In New Brunswick, a favourable change in customer mix shifted harvesting volumes from Crown licensed timberlands to our freehold timberlands, increasing our freehold sales and decreasing our timber services revenue. New Brunswick experienced improved contractor availability and increased volumes, however, contractor availability remained a significant challenge in Maine. Volumes were also impacted by unfavourable weather conditions stemming from a late start to winter conditions and longer than usual customer shutdowns due to the timing of holidays.
The weighted average selling price, excluding biomass, decreased 5% year-over-year. Softwood sawlog pricing decreased, as compared to the prior year period, due to a lower value product mix and weakness in end use markets. Hardwood sawlog pricing decreased primarily due to weakness in lumber markets. Softwood pulpwood pricing decreased as a result of abundant regional sawmill residuals impacting demand and pricing. Hardwood pulpwood pricing increased as compared to the prior year period due to a favourable customer mix.
Operating costs and expenses were $17.0 million during the fourth quarter, compared to $19.5 million during the fourth quarter of 2023. Increased costs related to increased freehold harvesting activity were offset by lower timber services activity and lower land management costs. Weighted average variable costs, excluding biomass, were flat as compared to the prior year period. Greater hauling distances and increased contractor rates were offset by a higher proportion of softwood products which carry lower variable costs and lower fuel adjustment costs.
Adjusted EBITDA was $3.7 million during the fourth quarter, compared to $4.4 million in the prior year period and Adjusted EBITDA margin for the quarter was 18% compared to 19% in the prior year period. Free Cash Flow was $3.0 million compared to $2.8 million in the same period of 2023 as a result of higher additions to land, roads, and other fixed assets and current income tax expense offset by increased proceeds from the sale of timberlands.
Year Ended December 31, 2024
Acadian generated sales of $116.2 million, compared to $93.5 million in the prior year. The sale of 752,100 voluntary carbon credits contributed $24.6 million to total sales in 2024. Timber sales volume, excluding biomass, increased 16% year-over-year primarily as a result of increased contractor availability and a favourable change in customer mix which shifted harvesting volumes from Crown licensed timberlands to our freehold timberlands, increasing our freehold sales and decreasing our timber services revenue, as compared to 2023.
Increased timber sales volumes were offset by decreased pricing as a result of changes in product mix and weak end use markets. Acadian’s weighted average selling price, excluding biomass, decreased 5% from the prior year. Lower sawlog prices stemming from changes in product mix and weakness in lumber pricing as well as lower hardwood pulpwood prices due to shorter hauling distances were partially offset by higher softwood pulpwood prices early in 2024.
Operating costs and expenses were $92.5 million during 2024, compared to $73.9 million in the prior year. The year-over-year increase reflects the addition of costs related to carbon credit sales as well as higher timber sales volumes. Weighted average variable costs, excluding biomass, increased 2% over the prior year due to greater softwood sawlog hauling distances and higher contractor rates partially offset by changes in product mix and lower fuel adjustment costs.
Adjusted EBITDA for the year ended December 31, 2024 was $38.9 million, compared to $20.6 million in the prior year for the reasons discussed above and Adjusted EBITDA margin was 33% compared to 22% in the prior year. Free Cash Flow was $29.7 million compared to $15.0 million in 2023 due to higher Adjusted EBITDA and higher proceeds from sale of timberlands, partially offset by higher current income tax expense.
Net income for the year ended December 31, 2024 totaled $21.7 million, or $1.24 per share, compared to net income of $29.4 million, or $1.72 per share, in the prior year with higher operating income offset by lower non-cash fair value adjustments in 2024 compared to 2023.
Segment Performance
New Brunswick Timberlands
The table below summarizes operating and financial results for New Brunswick Timberlands:
| Three Months Ended | Year Ended | |||||||||||||||
| December 31,
2024 |
December 31,
2023 |
December 31,
2024 |
December 31,
2023 |
|||||||||||||
| Sales (000s m3) | ||||||||||||||||
| Softwood | 108.7 | 98.9 | 463.1 | 374.1 | ||||||||||||
| Hardwood | 62.7 | 61.3 | 270.4 | 249.2 | ||||||||||||
| Biomass | 28.4 | 23.5 | 60.7 | 98.0 | ||||||||||||
| Total | 199.8 | 183.7 | 794.2 | 721.3 | ||||||||||||
| Sales ($000s) | ||||||||||||||||
| Softwood | $ | 7,777 | $ | 7,490 | $ | 33,705 | $ | 27,675 | ||||||||
| Hardwood | 5,739 | 5,884 | 24,242 | 23,977 | ||||||||||||
| Biomass | 359 | 982 | 1,305 | 3,948 | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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