Cascades Reports Results for the Fourth Quarter and Full Year 2022

Cascades Inc. reported its unaudited financial results for the three-month period and fiscal year ended December 31, 2022.

Mario Plourde, President and CEO, commented: “We are pleased with our fourth quarter consolidated performance, which showed continued positive momentum in our Tissue Papers segment, and good underlying performance in our packaging segments. The wide-ranging profitability and operational initiatives that we have been progressively implementing throughout our operations gained traction as the year progressed, and fuelled the 10.2% consolidated EBITDA (A) margins in Q4.

“Our operations have faced more than $475 million of production, raw material, freight and energy cost headwinds within the span of the calendar year 2022 alone, and our teams have done an excellent job at executing multiple countermeasures. These have taken longer in our Tissue Papers segment, where price rebalancing takes time to be realized, but we are encouraged by the progress being made and expect continued benefits to be generated from operational and profitability initiatives across our operations.

“Sales in our Tissue Papers segment were stable sequentially. This reflected higher selling prices and favourable FX, offset by lower volumes. This business doubled its EBITDA (A) as benefits from lower transportation costs, lower raw material costs and pricing initiatives mitigated the impact from lower volumes and higher production costs, the latter of which includes the impact of the temporary curtailment of one of our paper machines at our St. Helens, Oregon tissue facility since mid-September”.

 

THE BEAR ISLAND PROJECT

Regarding the Bear Island project, Mario Plourde said the start-up is scheduled for the end of March.

“Capital investments for this project totaled $107 million in the fourth quarter and $335 million in the calendar year 2022. The Company expects to invest $175 million to complete the project in 2023, with these investments weighted to the first half of the year,” commented the CEO.

“As we have stated previously, the elevated capital investment levels for this project combined with lower profitability levels generated by our Tissue Papers segment resulted in an important increase in our leverage ratio in 2022. We expect this trend to reverse as production is ramped up at our Bear Island facility, and operational and financial performance of our Tissue Papers segment continue to improve.”

NEAR-TERM OUTLOOK

Discussing near-term outlook, Plourde commented, “We are remaining prudent in our outlook, as macro-economic conditions continue to be challenging and unpredictable, and inflationary pressures on costs, while easing, continue. Despite this, we have started 2023 in a good position to drive growth throughout the year.

“We expect results in our Tissue Papers segment to slightly improve sequentially. While we anticipate continued positive momentum from operational and profitability initiatives, more favourable raw material prices, and good demand from retail tissue products, our tempered outlook for this segment reflects softer demand for Away-from-Home products, and the delayed restart of the machine at our St. Helens, Oregon facility that occurred on February 10.

“As far as our longer-term outlook, we will provide a comprehensive update of our 2022- 2024 Strategic Plan in conjunction with our Q1 2023 results on May 11, 2023,” he concluded.

To read Cascades complete Fourth Quarter and Full Year 2022 report, click here.