Cascades Inc. shares second quarter 2024 financial results

Cascades Inc, a leader in the recovery and manufacturing of green packaging and hygiene products, has announced its financial results for the second quarter of 2024. The company reported sequential growth driven by strong performance across all three of its business segments.

In the Tissue Papers segment, increased raw material costs were offset by high volumes and reduced transportation costs. The combination of higher volume and slightly higher prices in the Specialty Products segment exceeded the impact of rising raw material costs.

The Containerboard segment saw increases in prices, volume, and mix, coupled with reduced transportation and energy costs. These factors helped mitigate the impact of higher raw material costs and extended downtime at the Greenpac and Bear Island mills, which reduced production capacity by approximately 8,000 tons during the quarter.

Hugues Simon, President and CEO of Cascades, commented: “In my first eight weeks at Cascades, I have been inspired by the Company-wide drive to create meaningful value for our customers and shareholders. We expect consolidated third quarter results to be stronger sequentially, driven by improved Containerboard results as price increases are implemented and production efficiency levels are normalized following planned maintenance in the second quarter, and the unplanned extended downtime at Bear Island and Greenpac. Consolidated results are also expected to benefit from stable results in the Specialty Packaging business. At the same time, higher pulp prices and softer pricing due largely to a less favorable sales mix are expected to translate into lower results from the Tissue Papers segment. More broadly, the ongoing Bear Island facility ramp-up remains a priority, as is the roll-out of announced price increases in Containerboard and continued focus on profitability, efficiency and productivity initiatives throughout our operations”.

Cascades’ sales for the second quarter totaled $1.18 billion, an increase of $12 million from the previous year. This growth was driven by a favorable sales mix impact of $30 million and a positive foreign exchange effect of $14 million. However, these gains were partially offset by net negative impacts of $25 million due to lower selling prices and $12 million related to reduced volumes, primarily in Tissue Papers.

The quarter’s EBITDA was $112 million, a decrease of $29 million (21%) compared to the same period last year, reflecting lower selling prices and elevated raw material costs.

The results also include a one-time expense of $5 million related to a consulting contract with Mario Plourde and stock units granted to new CEO Hugues Simon.

 

SECOND QUARTER 2024 HIGHLIGHTS

• Sales: $1.18 billion (compared to $1.11 billion in the previous quarter and $1.17 billion in the same quarter of 2023);
• Operating income: $34 million (compared to $9 million in the previous quarter and $64 million in Q2 2023).
• Net income per common share: $0.01 (compared to a loss of $0.20 in the previous quarter and earnings of $0.22 in Q2 2023);
• Adjusted EBITDA: $112 million (compared to $103 million in the previous quarter and $141 million in Q2 2023);
• Adjusted net income per common share: $0.08 (compared to breakeven in the previous quarter and earnings of $0.27 in Q2 2023);
• Net debt: $2.093 billion (compared to $2.020 billion at the end of March 2024). The net debt/adjusted EBITDA ratio stands at 4.2x, compared to 3.8x in the previous quarter;
• Capital expenditures: $23 million in the second quarter (compared to $41 million in the previous quarter and $104 million in the same period of 2023). The forecast for 2024 is now lower than the initial estimate of $175 million.

Cascades’ complete second quarter 2024 report can be found on the company’s website: https://www.cascades.com/en/news/cascades-reports-results-second-quarter-2024.