Cascades releases financial results for the fourth quarter and fiscal year 2024

Cascades announced its unaudited financial results for the fourth quarter and fiscal year ending December 31, 2024. The company reported growth in sales and operating profit, driven by higher average prices and favorable raw material costs. However, the company faces challenges related to macroeconomic uncertainty and potential trade tariffs between Canada and the United States.

PERFORMANCE IN THE FOURTH QUARTER

In the fourth quarter of 2024, Cascades recorded sales of $1.211 billion, an increase on the $1.138 billion in the same period of 2023. Operating profit was $16 million, reversing the operating loss of $24 million in the fourth quarter of the previous year. Adjusted EBITDA amounted to $146 million, up 20% on the $122 million in the fourth quarter of 2023.

On the other hand, the company reported a net loss of $13 million, or $0.13 per ordinary share, improving on the loss of $57 million, or $0.57 per share, in the same period last year. On an adjusted basis, net income was $25 million, or $0.25 per ordinary share, compared to $5 million, or $0.05 per share, in the fourth quarter of 2023.

ANNUAL RESULTS

In consolidated 2024, Cascades achieved sales of $4.701 billion, surpassing the $4.638 billion recorded in 2023. Operating profit was $95 million, more than double the $40 million of the previous year. Adjusted EBITDA totaled $501 million, down from $558 million in 2023, reflecting operational challenges and higher costs in some areas.

The company recorded an annual net loss of $0.31 per ordinary share, an improvement on the loss of $ 0.76 per share in 2023. The company’s net debt increased to $2.096 billion, bringing the net debt to EBITDA ratio to 4.2x, compared to 3.4x at the end of 2023.

ANALYSIS AND OUTLOOK

Cascades’ CEO, Hugues Simon, pointed out that the quarter’s results were within the company’s expectations. The performance was driven by higher average sales prices and favorable raw material costs in the containerboard segment. In the tissue sector, average prices also offset slightly higher operating costs.

In addition, the devaluation of the Canadian dollar benefited results, but resulted in an increase in the company’s debt due to the $1.3 billion in US dollar-denominated bonds.

The executive warned that raw material costs will continue to be a favorable factor in the first quarter of 2025, but stressed that macroeconomic uncertainty could impact customer demand and purchasing patterns. Cascades is monitoring developments regarding the implementation of bilateral tariffs between Canada and the United States, as around 15% of the company’s revenues are potentially exposed to these tariffs.

To mitigate negative impacts, the company is implementing changes in the supply of raw materials, reallocating production to reduce international shipments and adjusting its commercial strategies with customers and suppliers.

INVESTMENTS AND DIVIDEND DISTRIBUTION

Cascades’ capital expenditures totaled $127 million in 2024, and the forecast for 2025 is approximately $175 million. The company continues to focus on initiatives to increase efficiency, productivity and operational safety, as well as strengthening its commercial position to become a preferred supplier.

The Board of Directors has declared a quarterly dividend of $0.12 per common share, scheduled to be paid on March 20, 2025 to shareholders of record as of March 6. In the fourth quarter, the company did not repurchase common shares for cancellation.

With the successful execution of its strategic objectives over the next 24 months, Cascades seeks to strengthen its free cash flow and reduce its debt, creating opportunities for future growth and shareholder value generation.