West Fraser (TSX/NYSE: WFG) reported USDOC preliminary AR7 rates would lower combined cash deposit rate from 26.47% to 20.70%.

West Fraser expects a $73M non-cash Q1-26 charge and an additional $41M non-cash charge to export duty expense, a $15M refund from AR1 liquidation, incremental interest expense, resumed Blue Ridge mill operations, Henderson production start, and High Level OSB operations ending by April.

Update on US Department of Commerce ('USDOC') Softwood Lumber Duties
The USDOC issued preliminary rates for the seventh administrative review period (AR7) on April 9 for Anti-Dumping Duties (ADD) and Countervailing Duties (CVD), covering shipments made during the 2024 calendar year. These rates are expected to be finalized and come into effect later this year and would decrease the Company's combined current cash deposit rate from 26.47% to 20.70% at the announced rates.

The Company expects to record a $73 million non-cash charge in Q1-26 to export duty expense, representing the difference between previously recorded expense for 2024 based on CVD cash deposit rates of 2.19% and 6.85% during the year and the preliminary CVD rate released of 15.93%.

Additionally, the USDOC is processing the liquidation of ADD for the first administrative review period (AR1) covering exports between August 2017 and December 2017. Based on the liquidation rate, the Company expects to receive a refund of $15 million in 2026. The Company expects to take an additional $41 million non-cash charge to export duty expense in Q1-26, representing a change in the estimate of amounts recoverable and payable covering all the administrative review periods as a result of additional information from the liquidation process.

The Company expects to record incremental interest expense on export duty deposits in Q1-26 in relation to the above matters.

Source: stocktitan.net