Weyerhaeuser (0LWG.L) delivered QQ4 2024 results with revenue of $1.708 billion, gross profit of $304 million and net income of $81 million ($0.11 per share). The topline declined 3.72% year over year and 1.61% quarter over quarter, while gross margin remained pressured at roughly 17.8%, reflecting a challenging mix and input costs within the timber and wood products cycle. Operating income of $141 million and EBITDA of $266 million signaled modest operating leverage despite a low margin environment, contributing to a net margin near 4.7% for the period. Cash flow from operations was sound at $218 million, but capital expenditures of $265 million produced negative free cash flow of about $47 million, underscoring a cash flow discipline dynamic: cash generation is real, yet capital allocation and debt management remain critical to sustain distributions and growth.
From a balance sheet perspective, Weyerhaeuser remains asset-rich with total assets of $16.54 billion and a sizeable timberland and related property base (Property, Plant & Equipment net around $14.49 billion). Liabilities total $6.82 billion, yielding a conservative debt ratio of about 0.317 and a debt-to-capitalization around 0.350. The company carries net debt around $4.42 billion after taking into account cash of $684 million, implying modest leverage for a timber REIT with a long-duration asset base. The dividend burden, reflected in a payout that exceeds near-term earnings (dividend payout ratio reported near 1.79x in the data), raises questions about sustainable cash-based returns absent FFO/adjusted metrics typical for REITs. Valuation metrics show a premium versus some peers (P/E ≈ 63x, P/BV ≈ 2.1x, and a price-to-sales around 12x), suggesting investors should weigh asset quality and long-cycle cash generation against near-term earnings volatility.
Overall, QQ4 2024 presents a prudent but cautious risk/return profile: meaningful asset-backed cash flows, solid balance sheet, and a dividend that remains attractive for income-oriented investors if supported by stronger FFO/recurring free cash flow in the quarters ahead. The near-term trajectory will hinge on housing-market demand, lumber pricing, input costs, and management’s capital allocation decisions aimed at deleveraging and optimizing returns for shareholders.