What’s going on here?
Acadian Timber’s second-quarter revenue slipped to C$17.1 million, missing analyst estimates after last year’s carbon credit injection failed to repeat.
What does this mean?
Acadian Timber’s results show what happens when one-off gains can’t be counted on. Without last year’s C$19.7 million carbon credit tailwind, this quarter’s figures looked leaner: earnings per share came in at C$0.15, and adjusted EBITDA was C$2.4 million with a 14% margin. Rough weather and a shift to in-house logging stunted operations in Maine, cutting timber sales. Meanwhile, New Brunswick pulled off higher timber volumes, but lower prices and slim revenue from timber services tempered those wins. Still, Acadian is eyeing Canada’s compliance market for its next carbon credit opportunity, and new protocols could broaden its options. Despite softer numbers, a stable sawlog outlook keeps management confident for the rest of the year.
Why should I care?
For markets: Carbon credits shape timber’s value.
Acadian Timber’s swing in revenue highlights how carbon credits are becoming an essential piece of the industry’s puzzle. With shares trading at 17 times forward earnings – right around its recent average – investors seem to have baked in both the operational bumps and optimism about carbon markets. The sector as a whole still has buy-in, with target prices about 8% higher than current levels and no analysts recommending a sell.
The bigger picture: Forests are more than just lumber.
Timber companies are fast becoming major players in carbon markets, turning environmental assets into solid revenue. As Canada’s rules around carbon credits mature, forestry firms could tap fresh income streams beyond traditional logging. Carbon credit sales not only help hedge against price swings in the timber market, but they could also bring long-term change to the industry’s economics.
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