Operator:

Good morning, and welcome to Mercer International's Fourth Quarter 2025 Earnings Conference Call. On the call today is Juan Carlos Bueno, President and Chief Executive Officer of Mercer International; and Richard Short, CFO and Secretary. I will now hand the call over to Richard Short. Richard Short: Thanks, Shannon. Good morning, everyone. Thanks for joining us today. I will begin by touching on the financial and operating highlights of the fourth quarter before turning the call to Juan Carlos to provide further color into the markets, our operations and our strategic initiatives. Also, for those of you that have joined today's call by telephone, there is presentation material that we have attached to the Investors section of our website. But before turning to our results, I would like to remind you that we will make forward-looking statements in this morning's conference call. According to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, I'd like to call your attention to the risks related to these statements, which are more fully described in our press release and in the company's filings with the Securities and Exchange Commission. Our operating EBITDA for the fourth quarter was negative $20 million, up $8 million when compared to the third quarter's results. This change in performance was largely due to stable production across all our mills and the benefits of our One Goal One Hundred program. Over market headwinds, including pricing, weak demand and elevated fiber costs in both Germany and Canada continue to weigh on our overall results. The current quarter's EBITDA also includes a noncash inventory impairment of $23 million. In the fourth quarter, we recognized total noncash impairment charges against our long-lived assets of $216 million or $3.22 per share. $204 million of this was against the assets of the Peace River mill, a requirement under U.S. GAAP that reflects the ongoing weakness in the hardwood pulp market. We also recorded a $12 million impairment in our solid wood segment related to the sale of obsolete equipment. Given the challenging hardwood pulp market conditions, there are a number of strategic initiatives underway with the goal of returning the Peace River mill to profitability. These include expanding softwood pulp production, exploring government support for incremental energy generation and a carbon capture project. Unfortunately, U.S. GAAP does not allow for the inclusion of these initiatives in the impairment assessment. Juan Carlos will provide more detail on these initiatives shortly. Our pulp and solid wood segments both reported negative quarterly EBITDA of $11 million in the fourth quarter. Additional segment disclosures are available in our Form 10-K, which can be found on our website and that of the SEC. In the fourth quarter, NBSK markets weakened due to the sustained uncertainty of the global economy. As a result, our softwood sales realizations decreased to $702 per ton, down from $728 per tonne in the third quarter. The NBSK net price in China saw a small decline to $671 per ton, a $19 decrease from the third quarter. We observed a more significant drop in the North American NBSK list price, which averaged $1,568 per tonne in the fourth quarter, a reduction of about $132 from the third quarter. The European NBSK list price remained stable at an average of $1,498 per tonne. Hardwood markets in China showed improvement in the fourth quarter, largely due to stronger demand and increased domestic fiber costs. Meanwhile, demand and pricing in North America remained steady. Overall, our hardwood sales realizations were flat at $528 per tonne compared to the third quarter. The average price gap in China between softwood and hardwood pulp narrowed by $56 per tonne this quarter to approximately $130 per ton. The average net price for eucalyptus hardwood in the fourth quarter was $540 per tonne, which is an increase of $37 from the third quarter. In North America, the average list price was flat compared to the third quarter at $1,198 per ton. As mentioned previously, the fourth quarter included a $23 million noncash inventory impairment, primarily driven by low pulp prices and high fiber costs. Of this amount, approximately $15 million was attributed to softwood inventories and the remainder was against hardwood inventories. Pulp sales volumes in the fourth quarter increased by 20,000 tons to 472,000 tons. Pulp production remained relatively stable in the fourth quarter at 460,000 tons. However, if we adjust for planned downtime, our production volume improved by about 20,000 tons. We had a total of 21 days of planned maintenance at our Stendal mill in the fourth quarter, which reduced production by 42,000 tons compared to the third quarter when we had a total of 20 days of planned downtime at the Celgar and Rosenthal mills, which reduced production by about 21,000 tons. In the first half of 2026, we do not have any planned maintenance downtime. In Q3, Rosenthal will be down for 14 days and Peace River will be down for about 10 days. In Q4, Celgar will be down for 20 days. Overall, we expect to see almost 50 days less planned maintenance downtime compared to 2025. Our solid wood segment lumber pricing -- sorry, for our solid wood segment, lumber pricing in the fourth quarter modestly decreased compared to the third quarter in the U.S. as weak demand was only partially offset by reduced supply. In Europe, pricing was stable in the fourth quarter compared to the third quarter. The Random Lengths U.S. benchmark price for Western SPF #2 and better averaged $422 per thousand board feet in the fourth quarter, a decrease from $477 per thousand board feet in the third quarter. Today, that benchmark price for Western SPF # 2 and better is around $448 per thousand board feet, a $46 increase from the end of 2025. In the fourth quarter, lumber production decreased by about 6% to 109 million board feet from the third quarter. This was primarily due to reduced sawlog availability and reduced production during the holiday season. Similarly, lumber sales volumes decreased to 103 million board feet, a drop of about 7% from the third quarter, which mirrored the lower production. Electricity sales in the fourth quarter totaled 202 gigawatt hours and pricing was about $105 per megawatt hour, which is about the same as the third quarter. Fiber costs for both our pulp and solid wood segments were relatively steady in the fourth quarter compared to Q3. In the first quarter of 2026, we are expecting fiber costs to increase in both Canada and Germany caused by supply constraints resulting from reduced sawmilling activity. In addition, Germany will also be impacted by seasonal demand for fiber from the biofuel industry. Our mass timber operations within the solid wood segment had modestly higher revenues in the fourth quarter compared to the previous quarter. In Q4, the elevated interest rates in the U.S. continued to be a drag on overall market momentum. However, our mass timber business has developed a healthy order book. Today, the order book totals about $163 million, which compares nicely to our order book of approximately $80 million at the end of Q3. We currently expect our 2026 mass timber revenue to be about $120 million. We continue to make progress on our One Goal One Hundred. As a reminder, this initiative focuses on cost reduction and operational efficiencies with a target to improve our profitability by $100 million by the end of 2026 using 2024 as a baseline. We realized approximately $30 million in cost savings and reliability improvements in 2025. In the fourth quarter, our aggregate liquidity improved by over $54 million to $430 million, comprised of about $187 million of cash and $243 million of undrawn revolvers. This improvement in our liquidity was the direct result of our working capital management and cost reduction activities. In the fourth quarter, we invested a total of $14 million of maintenance capital across our facilities. We reported a consolidated net loss of $309 million for the fourth quarter or $4.61 per share, which includes the noncash long-lived asset and inventory impairments, which aggregate to roughly $239 million or $3.57 per share. In the third quarter, we reported a net loss of $81 million or $1.21 per share. That ends my overview of the financial results. I'll now turn the call over to Juan Carlos. Juan Bueno: Thanks, Rich. Our operating results continue to be undermined by significant market headwinds. The ongoing down cycle conditions forced us to recognize noncash asset impairments, including a write-down of our Peace River mill's fixed assets. And while these noncash impairments will understandably dominate headline results, the fact is that underlying operational performance improved quarter-over-quarter. Cost reductions, efficiency improvements and working capital reductions contributed to the $54 million improvement in our liquidity, and we remain focused on improving the controllable drivers of performance. This focus is highlighted through our One Goal One Hundred program. Launched in Q2, it has yielded about $30 million of concrete results for the full year, and we are on track to achieve our goal of $100 million in improvements by the end of 2026 when compared to our 2024 baseline. As Rich mentioned, the noncash impairment of our Peace River mill was the result of us being subject to U.S. GAAP rules. Unfortunately, these rules do not allow us to take into account 2 very important projects that our team has been working on for a couple of years already, our carbon capture project and the expansion of the mill's bioenergy output with support of the government, projects that will be transformative for the mill. Previously, we had announced our plans to install a carbon capture demonstration unit at our Peace River mill in the fourth quarter as part of a joint development project with Svante Technologies. I'm pleased to report that the pilot plant is operating and the results so far are very encouraging, both in terms of the efficiency as well as purity of the CO2 being captured. The results of the 6-month testing period of this demonstration unit will be instrumental in our decision-making process for future phases of this project. This venture is not only important for the Peace River mill, but will be one of the steps in our journey to transform our pulp mills into bio refineries with multiple sustainable revenue streams. Now turning to the overall business environment. The trade war headwinds have created an unprecedented level of market uncertainty that persists even though current tariffs appear to be stable for now. We're expecting further tariff uncertainty as CUSMA is to be renegotiated in June this year. The majority of the trade-related impacts we have faced are due to the indirect impacts of tariffs and trade uncertainty. As it stands today, the only tariff barrier we're facing is a 10% tariff on our European lumber imports into the U.S. This does, however, compare favorably to Canadian imports, which today face an average combined tariff and duty rate of approximately 50% varying by company. As a result, we have already seen Canadian lumber curtailment announcements and expect more to come. This is creating a reduced supply of residual chips for pulp mills and is putting pressure on fiber costs. We feel our Celgar mill is well positioned given its ability to access the U.S. fiber market and our ability to harvest and process whole logs. Nonetheless, we're experiencing some fiber cost inflation as expected. As mentioned, our main import from the U.S. into Canada is wood chips for our Celgar pulp mill, which today amounts to about 45% of the fiber consumption of the mill. We feel this is a competitive advantage for us, and we have the ability to grow this percentage going forward if required. Most importantly, there are no counter tariffs applied to this fiber. Our EBITDA of negative $20 million reflects 21 days of planned maintenance downtime at our Stendal mill, low prices in most of our markets and high fiber costs. Overall, NBSK pulp markets weakened in the fourth quarter, including in North America, reflecting the indirect effects of the evolving tariff environment. Specifically, North American fluff pulp previously shipped to China primarily for diaper applications is now subject to a 10% tariff. Consequently, Chinese manufacturers are pivoting to other products and displaced North American fluff pulp is now being redirected into paper applications, adding supply pressure and weighing on the North American market. Chinese NBSK prices were also under pressure as weak paper prices pushed certain producers to opportunistically substitute and run their machines more slowly. Meanwhile, European NBSK prices were relatively stable. Now turning to hardwood. Prices in China increased in the fourth quarter, driven by improving demand and higher domestic fiber costs. Meanwhile, in North America, hardwood prices were flat. Looking ahead, we expect to see some modest NBSK and NBHK price improvements in Q1 in both Europe and China, while North America is expected to be stable. However, trade uncertainty continues to be an overhang on this business and until trade restrictions are reduced, the supply-demand dynamic will be heavily influenced by the supply side. In total, our pulp production was flat at 460,000 tons compared to Q3. This result reflects an overall production improvement given that we lost roughly 42,000 tons due to Stendal's Q4 planned maintenance shut compared to only 21,000 tons of planned downtime in Q3. Our lumber production was down about 6% relative to Q3 due to reduced production during the holiday season and the availability of sawlogs. Overall, we're pleased with our lumber production. Pulp fiber costs were essentially flat relatively to Q3. In Canada, our wood costs didn't change, but in Germany, the increased demand for pulp logs and sawmill residuals and lower supply of sawlogs pushed fiber prices up slightly for both our pulp and sawmills. Looking ahead to Q1, we expect fiber costs to increase meaningfully for both our pulp and sawmill businesses. Our pulp business will be impacted by reduced sawmill residual availability and our German pulp mills will also face increased seasonal competition for wood chips from biofuel producers and reduced sawmill chip supply. In Germany, we expect harvesting levels to improve as the lumber market improves, while in Canada, lower fiber availability will keep price pressure on fiber unless the demand side of the equation changes. The business environment for our solid wood segment was consistent with Q3. It continues to be held back by a weak European economy and the impact of high mortgage rates with seasonal construction slowdown in Q4, creating modestly weaker pricing in the U.S. lumber market. The stagnation of the European economy continues to dampen the demand for pallets and the result of this very adverse business environment is the main reason behind the $11 million EBITDA loss of our solid wood segment in Q4. Given the many economic forces affecting U.S. construction activity, U.S. lumber pricing could be volatile in the short term, while demand is expected to remain weak in Q1. In contrast, we expect modest upward pricing pressure in the European market, primarily due to increasing sawlog prices. Any meaningful long-term improvement in either the European or U.S. markets remains dependent on improved economic conditions and lower long-term interest rates. Our flexible sawmill production capabilities enable us to be competitive in all lumber markets. We intend to continue to maintain a strong presence in Europe and the U.S. while serving the quality-sensitive Japanese market. In Q4, 41% of our lumber volume was sold in the U.S. Looking forward, we believe the U.S. lumber market will be driven by favorable homeowners demographics. This, combined with reduced North American lumber capacity will create a supportive supply-demand dynamic in the midterm. European shipping pallets markets remain weak with pricing staying generally flat due to the overhang of the European economy, particularly in Germany, and we're expecting generally stable pricing in the first half of 2026. Biofuels were up almost 10% relative to Q3 due to seasonal demand and the prices may still increase slightly. With regards to our mass timber business, revenues were up roughly 6% compared to Q3. We continue to see a steady volume of incoming project inquiries in terms of both number and total dollar value of projects. As a reminder, the projects we are bidding on and winning today are meant to be constructed in average about 9 months from now or well into 2026. We expect '26 revenues to be more than double what we had in 2025 or above $120 million. As a result, we will begin ramping our Conway facility to 2 shifts in early Q2 and expect to do the same at Spokane in late in the year. Today, our mass timber backlog of projects sits at about $163 million, practically twice of where we were at the end of Q3. It is clear that a large portion of the growing interest in mass timber is coming from data center hyperscalers. The appeal to this group is the speed of construction, which can be about 1/3 shorter than traditional construction methods as well as the carbon sequestration benefits that only mass timber brings. More importantly, to Mercer is that our industry is leading North American capacity -- excuse me, to Mercer is that our industry-leading North American capacity leaves us well positioned to meet this growing demand. As a result, we're confident in this business being a growth engine for Mercer in the short term. We have roughly 30% of North American cross-laminated timber production capacity, a broad range of product offerings, including design assist and installation services and a large geographic footprint with manufacturing sites in the Northwest as well as the Southeast, giving us competitive access to the entire North American market. In closing, market weakness is expected to persist in 2026 and as a result of our priority is on maintaining strong liquidity. To do this, our strategy includes further cost reductions, lower capital expenditures and other working capital measures, along with a commitment to rebalance our portfolio of assets that combined will improve our balance sheet. Above all, we're committed to prudent financial management. In light of the ongoing economic uncertainties and our focus on liquidity, our planned CapEx spend is about $60 million to $80 million in 2026. And this capital budget is focused on maintenance, environmental and safety projects. The headwinds facing our industry have proven to be both longer and more severe than many anticipated. However, our experienced management team has navigated through previous commodity downturns, and I'm confident that our short-term strategy will allow us to weather the storm. I also believe that the current market conditions validate our long-term strategy that focuses on transforming our pulp mills into bio refineries with additional revenue streams that can not only help balance our product mix but grant us further resilience during pulp down cycles. Our work on our lignin project pilot plant in Rosenthal is a great example as is the carbon capture pilot plant in Peace River and the work that we're doing in Stendal on sustainable aviation fuel. As 2026 progresses, we will remain focused on those elements of our business. that we can control while implementing our short-term strategy. Thank you for listening. And I will now turn the call back to the operator for questions. Operator: [Operator Instructions] Our first question comes from the line of Roger Spitz with Bank of America. Roger Spitz: The first question, Rich, is, can you say how much headroom that you have under any of your maintenance covenants as of December 31? Richard Short: Yes. So we've got -- I don't have the number in front of me, but we're comfortable that we're well under the covenants at the end of the quarter, but we will expect them to get tighter as the year progresses given the weak outlook. Roger Spitz: Great. And then secondly, I don't know if you want to comment in addition to 2026 CapEx, but cash interest, cash taxes and any working capital view inflow or outflow? Richard Short: So we're expecting taxes to be negligible this year. Interest to be around $120 million. And you heard Juan Carlos with the CapEx number, $60 million to $80 million. Roger Spitz: I'm sorry, I misspoke. I was thinking about working capital inflow or outflow. Richard Short: It will be a net outflow probably around $100 million to $150 million at this point. Roger Spitz: It will be an outflow of $100 million to $150 million. What would be driving that? Richard Short: We're going to have -- well, obviously, it's the interest, the CapEx and probably a small net outflow on working capital for the year. Roger Spitz: Okay. I was just thinking working capital itself as opposed to some taxes and CapEx. Are you including that in when you gave the $100 million to $150 million? Richard Short: Yes. Roger Spitz: Okay. So I got to net that out. Operator: Our next question comes from the line of Sean Steuart with TD Cowen. Sean Steuart: Hoping you can give us some updated thoughts on potential asset recycling opportunities as a measure to, I guess, expedite potential deleveraging of the balance sheet. And with some flexibility on available liquidity here, any thoughts on asset closure potential and maybe costs that would be associated if you're taking potential pulp lines down? Juan Bueno: Yes, Sean, in terms of asset sales or restructuring, this is a subject that we have been analyzing and working on for quite some time now. Obviously, we are very conscious that on the very tough conditions that we're working on right now, the possibility of claiming reasonable value for any particular asset in this cycle is not the right time. But we are obviously looking into that as we focus on our core assets and see our way through this trough. But that is at the center of our debt reduction plans without a doubt. Sean Steuart: Okay. And with respect to the buildup of the order file for mass timber, which that's encouraging, can you give us a sense of expected margins associated with that uplift in sales? Juan Bueno: Yes. What I can say in that sense is when you look at 2025, which was relatively low as we were basically working with small projects all around, that year, even though it was a low sales result, it was a neutral cash flow. So the business was able not to be a drag despite the fact that it was still low on sales. Now for this year, obviously, we expect that to change with sales, as we said, north of $120 million and positive profitability and obviously, with a contribution to cash. So we're still in the single digits as this business has the potential to grow up significantly with the asset base that we have, considering that this $120 million that we're talking about is with Conway ramping up to 2 shifts only around April or so in the second quarter and Spokane only ramping up to the 2 shifts maybe by the end of the year. So for the majority of the year, we would be running, let's say, on average, 1.5 shift. So again, still single digits under that. But once we are running in 2 shifts on both facilities, obviously, we'll be looking at a double-digit profitability for that business and we're very encouraged by the growth that we're looking at. Not just withstanding the fact that we have $163 million in the order book that we mentioned earlier. A part of that is obviously going to happen in 2026. But we already have quite an important piece of business for 2027 in that order book. So again, it's filling up very nicely, and we're very confident of the growth that we will have in this business. Operator: [Operator Instructions] Our next question comes from the line of [ Edward Brucker ] with Barclays. Unknown Analyst: My first one is on Peace River. Is there any thought to potentially closing the mill? And if so, what is the timing of doing something like that? And are there any approvals from the government or hurdles that you have to go through to close like that? Juan Bueno: Well, on Peace River, what we're working on is our transition from less hardwood to more softwood. That is center and foremost because we believe that we can extract much more value from the mill if we produce softwood over hardwood. And we're well underway in that road. Remember, this was a mill that was 80-20 to hardwood. Right now, it's 70-30. And by the end of this year, we expect it to be 50-50. And it makes a big difference because we make money on softwood, we don't make money on hardwood, obviously, depending on the price of hardwood. Beyond that, when you look into the work that we have been doing, we mentioned these energy projects. Those would be very important contributors to the bottom line of Peace River. There's government support for those and also the carbon capture, which is further down the line, that's probably 2 years ahead of us or 3 years ahead of us, and that would be another important contribution to the profitability of the mill. So we do have a way through for this mill and are working actively with the government to support these projects to support the mill so that we can keep it and make this vision a reality. Unknown Analyst: Got it. And then my second question, just given the difficult market environment as well as potential cash burn for 2026. Any new thoughts on productivity with the maturity wall coming up in 2027 and then also, I guess, in 2028 as well? Richard Short: Sorry, Edward. How are we thinking about the '28 and '29? Is that your question? Unknown Analyst: Well, yes, in the revolver maturity ahead of that. Richard Short: Right. Okay. So the revolvers, we're talking to the banks, the banking groups for both that is currently underway. The 2028 and '29, we've got some runway there. So we're happy with that given where we are in the cycle. And we've been talking with our investors. So I think we're comfortable with where we are with those. And maybe if I could, just to pivot a little bit. I just wanted to clarify that our expectations around working capital for this year, I think I misunderstood Roger's question, we expect a modest cash outflow from working capital in 2026. Operator: Our next question comes from the line of Cole Hathorn with Jefferies. Cole Hathorn: I'd just like to follow up on the market dynamics from here. And if we stick to softwood pulp to begin with, we've started to see some supply disruptions with Indonesia reducing harvesting permits, which might impact the hardwood pulp market. We've seen hardwood pulp narrow the gap to softwood quite nicely. I know inventory levels are still high, but we've also got in Europe, SCA out with a price hike. I'm just wondering how do you see the outlook for the market? Is there more scope for upward pressure now that the gap to hardwood has narrowed? Juan Bueno: Cole, I think you're absolutely right. These latest developments in Indonesia are very significant. The impact or the known impact of April riyal taking 150,000 tons out of the market as downtime is important. The uncertainty, whether AP, [ Oaky ], 1.4 million mill start-up might be delayed. It's also important because that could take away 650,000 tons of hardwood in 2026. So yes, there's all this impact of raising chip prices in Vietnam and China, and that is happening as we speak, as you will point out. And given that, as you said, now the delta, Rich reported that the delta between hardwood and softwood was 130 at the end of the quarter, well, it's now 100. So with hardwood pushing up, we do believe that there's a pretty light likelihood that we will see improved prices beyond what we have in our forecast or at least much quicker than what we anticipated. We understand that we're now getting into the Chinese New Year. We understand that, that means everything slows down a bit, and we have to wait until after New Year's to see what the effect is. But I think if anything else, those very, very recent developments will tend to indicate a potential upward pressure on prices for both hardwood and inherently then for softwood piggybacking on it. So yes, it's rather positive. Cole Hathorn: Let's hope we see that reflect in the futures in the next couple of weeks. Shifting on to the lumber side and particularly, I'm thinking about Europe, you called out higher sawlog costs and also pulpwood costs, well, I suppose, wood chip costs for the pulp mills. It's always less clear how wood cost dynamics develop. I'd just like a little bit more color. What are you seeing into Q1? Is this just lack of harvesting that's driving up sawlogs and wood chips and pulpwood? And do you see any kind of turn in this market? Or is this kind of a structural we should be higher for longer? And the reason I ask that is you've obviously got the Nordic sawlog and pulpwood prices coming down. So I'm just wondering how the Central Eastern European wood basket is performing. Juan Bueno: Yes, Cole, that's a very interesting dynamic as we're living it right now. Let me start with one of the elements that have a big impact on all of this, and that's the German energy policy. They [ incentivize ] the burn of wood for energy purposes for pellet production and those kind of things. And what that creates is obviously a huge market for pellets, biofuels because the winter has been as hard as it has been, the prices of pellets have increased dramatically. And therefore, they're able to pay any price for residuals, whether it's wood chips or sawdust. They're in the lookout for anything they can buy. That has an impact on us because when we buy wood chips for our pulp mills, we're now competing with these absurd pellet prices and values that they can pay that are obviously much higher than what we normally pay. So that is one of the elements that is impacting right now our wood chip costs in Germany. Now when it comes to the pulp logs or the other residuals that we buy from other sawmills, that is dependent on the harvesting in Germany. and the level of calamity that Germany was expecting last year did not happen. So the harvest that was planned did not happen. And the result of that was a significant shortfall in terms of availability of sawlogs totally in the market. So there you have it. You have less output from sawmills, many of them running at slower speeds or cutting shifts. We suffered the consequences of it in Friesau, we had to slow down production at times during the quarter because there was simply not enough wood to go by. Again, as a result of this much, much lower harvesting levels and that creating a pinch. So that are the 2 main issues behind the fiber dynamic that we see in Germany. It's been different in Scandinavia. There's been a big storm over there, a big need to pick up what was left over of that storm. So a bigger inflow of fiber. Now the fact that Scandinavia will have now lower prices would at least allow for a little bit less pressure from Scandinavia as they were obviously looking at Germany or surrounding countries for supply before. Now they have plenty to work with what they have over there. So that eases a little bit of the pressure that we will get in our home turf. But overall, it's still a very tough business environment. That's why we're expecting fiber prices to increase until we see proper harvest levels come back and after we get through the seasonal aspect of bio pellets and biofuels. Obviously, we're in the middle of winter. Once that winter passes, the demand for pellets recedes and obviously, prices will naturally come down. That's a normal cycle for pellets. So that's a little bit of the pressure points. Cole Hathorn: That's helpful. And maybe if I just run forward with that, hopefully, the cost of your pulp mills come down in the summer period as the pellet demand declines and hopefully, harvesting volumes increase for the sawlogs. But I suppose the other dynamic is price of your products. Potentially, we get pulp prices higher, which would be supportive. But on the lumber side, we have some green shoots, I suppose, with like IFO commentary in Germany. There is off a very low base construction industry is looking a little bit better. Is there anything to call out there? Are you seeing any lead indicators on the chemical side or the auto side or anything on the construction that's giving a little bit more confidence maybe into the second quarter into the summer period as well? Juan Bueno: That's a very good question, Cole. And probably one of the things that we -- that everybody speaks about is in the case of Germany, the investment that the company has decided to make in matter of defense with very significant increases versus what they had budgeted in previous years. That is something that will move the German economy as a whole. That is something that we believe will have some impact. However, that impact is not going to be all of a sudden. That's a relatively slower pace of growth that we will see coming, but an important one for a country that has been stagnant and stuck in a recession for already 3 years. So which, again, is very uncommon for Germany. So we do see that there's a little bit of hope in that regard that there's a little bit of improvement coming, but it's not something that would happen overnight. We just see a gradual improvement over there, whether it's in construction activity. Obviously, we keep an eye very much on the U.K. That's a market that we serve quite a bit. That has been very good for us and where we dedicate a lot of resources and energy. Our prices in U.K. tend to be higher than what they are in Germany. So that's a market we privilege. Just as the market in Japan, we do as much business in Japan as we can as obviously, the margins over there are even better, and we're able to deliver the high-quality product that they need. The U.S. remains to be the valve when prices are high and they are trending higher, we can pivot to the U.S. And we've done that many times before. I think in times that we sell more volumes to the U.S., we're close to 60%, 55% or more of volume into the U.S. We're right now at 41%. But the prices over there are increasing. And despite this 10% tariff that we have, as we mentioned before, we believe we're pretty competitive into that market. So I think there's some positive momentum on prices overall in lumber for the year. That's what we would tend to expect. Operator: Our next question comes from the line of Dominic Gerster with Aperture. Dominic Gerster: Could you please comment on the extension of your 2 [ RCFs ], how are those discussions going with lenders and when you're expecting those to be concluded? Richard Short: We know these are going to be more expensive. I think the banks have their things that they want to change in the indentures. But I would say, overall, the conversations are going well. Dominic Gerster: That's helpful. And do you have any indication of when you're hoping to set this wrap up timing-wise? Richard Short: Yes, that's a good question. Before the end of Q2 for sure. Dominic Gerster: Understood. And then one final question. Anything on size, you can comment? Will there be the same size as the current facilities? Any additional color would be helpful. Richard Short: Yes. I think that's one thing we're talking about. So I think there is a bit of a push to reduce overall capacity slightly, but not to a level that we're uncomfortable with, but obviously, more liquidity for us is better. Operator: Our next question is a follow-up from Cole Hathorn with Jefferies. Cole Hathorn: I just wanted to ask around -- the point you made around pellets and the energy consumption. We're seeing industries lobby more and more to prevent imports and trade barriers. And when there's a dislocation, and it does seem like the priority of use should first be for wood, saw on wood products, then kind of the downstream pulp industries before you get into energy. Is there any lobbying ongoing by the pulp and paper industry to prioritize that to keep your raw materials a little bit lower rather they getting pushed out by energy? That's the first one. And secondly, there's been a lot of debate now around lower CO2 costs in Europe and the CO2 prices come down. Does that position you a little bit more favorably? Or is it not really an item of consideration? Juan Bueno: Very important questions. And the answer to the first one is absolutely yes. What we are absolutely contrary to the policy of the German government of promoting the use of wood for biofuel purposes straight off. It doesn't make any sense in our minds. We privilege very much the fact that we need to extract the highest value of the harvest that we make, and it should only be based on residuals that the pellet industry should operate on. And there's been a lot of lobbying effort on that end. Unfortunately, there's a lot of forces that are not necessarily aligned. There are other interests from other parties that are contrary to ours, but we stand by our by our belief that from a pure environmental perspective and value capture perspective, the right thing to do is what we're promoting and what we're advocating for. In terms of the CO2, as you say, yes, that's another part of the equation that we emphasize and that we have a line of communication with government on a regular basis to make sure that the fact that we have biogenic carbon in our operations that we have electricity that we generate by biomass sources, it's all taken into consideration when looking at all these CO2 emissions and credits and whatnot. And we are actively advocating for the proper allocation of those credits and the maintenance of those credits over time rather than a reduction of them precisely on the back of the type of business that we run that is very much in line with what the government is pushing for in terms of environment protection. Cole Hathorn: And then I have a question from an investor here that we're asking to everyone that has sawn wood business in Europe. They weren't able to give me a perfect answer, and I hope you can just kind of add some color to it. It might be too far out. But what we're seeing at the moment is we're seeing steel prices move up higher because of CBAM, plus we're seeing import tariffs on steel driving ultimately steel prices higher. We're also seeing cement prices higher. Historically, there always used to be this good correlation between sawn wood, lumber, steel and cement because you're all involved in the construction materials space. Do you see longer term any form of kind of pricing umbrella that might shift the industry to use more wood, considering it is only 5% of building materials outside of the Nordics in Europe. Is there something that you are tangibly seeing now or something that you see in the future? Or is this just a too long-dated positive to be relative in your -- in near-term thinking? Juan Bueno: I think, all that the evolution of the use of wood for construction, substituting steel and concrete is something that we will see coming. That is already happening. It just happens to be a very small fraction of the pie. Obviously, steel and concrete is the bread and butter of the construction industry and has been for decades. And changing that ship takes time. But when you look at Europe, in particular, let's talk about mass timber in Europe, where we do not participate. But that's a business that grows double digit per year. It's growing, I think, at 11% per year now. So there is an important growth on that element. And that, again, is substituting concrete and steel. When you look at that same growth in North America, we're talking about 22%, 24% per year. So -- and that's why we believe so much in the future of our mass timber business in North America because there's a tremendous push for it. And there's all the reasons, whether it's in construction cost, environmental, just speed of construction, the amount of labor that you need. Think about North America right now with all the political environment that we're facing, deportations and whatnot, labor for construction is a very significant issue, and we offer a solution for that problem. The amount of labor that is needed for mass timber construction is absolutely a fraction of what normal construction projects with concrete and steel would demand. So there is an alternative. There is a solution. It is more cost effective without any doubt to produce with -- to construct or build with mass timber, but it takes time for developers, architectures -- architects to understand mass timber. This is not something that everybody knows about. It's something that only with time and experience, people will believe and catch up on it. But again, the 20% growth year-over-year is already proof that there is a good chance that we'll see that market flourish. And that umbrella, as you say, shifting a little bit and giving some space for mass timber to develop and substitute traditional construction methods. Operator: And this concludes the question-and-answer session. I would now like to hand the call back over to Juan Carlos Bueno for closing remarks. Juan Bueno: Okay. Thank you, Shannon, and thanks to all of you for joining our call. Rich and I are available to talk more at any time, so don't hesitate to call one of us. And otherwise, we look forward to speaking to you again on our next earnings call in May. Bye for now. Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.