Cascades reports stable results in the tissue paper segment for the First Quarter of 2024

Cascades Inc. reported its unaudited financial results for the three-month period ended March 31, 2024.

Mario Plourde, President and CEO, commented that first quarter 2024 results met expectations, considering the context of elevated raw material prices, and ongoing inflationary pressure on operational costs.

Regarding the tissue paper segment, Plourde said it “executed well, with increased average selling prices partially offsetting the impacts from higher maintenance costs and softer seasonal volumes.”

NEAR-TERM OUTLOOK

Discussing near-term outlook, the CEO commented, “Consolidated second quarter results are expected to be stronger sequentially, driven by improved performance in our Containerboard segment as index price increases are implemented, and stable results in the Tissue Papers and Specialty Packaging businesses.”

 

ANALYSIS OF RESULTS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2024 (COMPARED TO THE SAME PERIOD LAST YEAR)

“The first quarter sales of $1,109 million decreased by $25 million compared with the same period last year. This decrease was driven by a $64 million impact from lower selling prices in all of our business segments. This was partially offset by a $23 million benefit from a more favourable sales mix in the Tissue segment, and a $16 million benefit from higher volume, the latter of which was a net result of a $46 million volume benefit in our packaging businesses and a $30 million negative volume impact in our Tissue business that reflects operational platform changes including closures completed in the past year,” stated Plourde.

The first quarter EBITDA (A) totaled $103 million, a decrease of $31 million, or 23%, from the $134 million generated in the same period last year. This decrease was largely driven by lower selling prices, primarily in the Containerboard segment, and higher raw material costs in the packaging businesses, the effects of which were partially offset by stronger volumes in these businesses. Production and freight costs were a headwind in Containerboard but were a tailwind for the Tissue Papers business, largely attributable to the optimization of this segment’s operational base.

The main specific items, before income taxes, that impacted Cascades’ first quarter 2024 operating income and/or net loss were:

• $28 million of impairment charges on assets, restructuring costs and other costs related to the closure of plants in Canada and the USA (operating income and net loss);
• $1 million unrealized gain on financial instruments (operating income and net loss);
• $2 million unrealized gain on interest rate swaps (net loss);
• $1 million foreign exchange loss on long-term debt and financial instruments (net loss).

For the three-month period ended March 31, 2024, the Corporation posted a net loss of $(20) million, or ($0.20) per common share, compared to a net loss of $(75) million, or ($0.75) per common share, in the same period of 2023. On an adjusted basis, the Corporation posted a net loss of less than a million dollars in the first quarter of 2024, or $0.00 per common share, compared to net earnings of $33 million, or $0.32 per common share, in the same period of 2023.

Cascades’ complete first quarter 2024 report is available on the company’s website: www.cascades.com/en/investors.