Cascades Reports Results for the Second Quarter of 2024

"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." – Hugues Simon, President and CEO, Cascades.

Aug. 8, 2024 - Cascades Inc. (TSX: CAS) today reported its unaudited financial results for the three-month period ended June 30, 2024.

The Corporation's second quarter 2024 results increased sequentially on stronger performances from all three business segments.

In Tissue Papers, the sequential impact from higher raw material costs was mitigated by favourable volume and lower transportation costs.

Higher volume combined with slightly stronger pricing in the Specialty Products business outweighed sequentially higher average raw material costs.

The Containerboard segment saw stronger pricing, volume and mix, and lower transportation and energy costs, the combined impact of which offset higher raw material costs and extended downtime at the Greenpac and Bear Island mills following a prolongation of planned maintenance at these facilities, which reduced production capacity in the second quarter by approximately 8,000 tons.

Discussing near-term outlook, Hugues Simon, President and CEO, 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 favourable 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."

Results for the three-month period ended June 30, 2024 (compared to the same period last year)

The Corporation's second quarter sales of $1,180 million increased by $12 million compared with the same period last year. This was driven by a combined favourable sales mix impact of $30 million in Tissue Papers and Containerboard and a $14 million favourable impact from foreign exchange. These were largely offset by net negative impacts of $25 million due to lower selling prices in Tissue and Containerboard and $12 million related to lower volumes primarily in the Tissue Papers business following operational platform changes in this business completed in the past year.

The second quarter EBITDA (A) totaled $112 million, a decrease of $29 million, or 21%, from the $141 million generated in the same period last year. This was largely driven by lower selling prices in the Containerboard and Tissue Papers segments, and higher raw material costs in our packaging businesses. The second quarter results also include a $5 million one-time compensation expense consisting of an 18-month consulting agreement with Mario Plourde (former President and CEO), commencing January 1, 2025, and deferred share units granted to Hugues Simon following his appointment as President and CEO effective June 17, 2024.

The main specific items, before income taxes, that impacted our second quarter 2024 operating income and/or net earnings were:

• $10 million of restructuring and other costs related to plant closures in Canada and the United States (operating income and net earnings);
• $1 million unrealized gain on financial instruments (operating income and net earnings);
• $1 million unrealized loss on interest rate hedge instruments (net earnings).

For the three-month period ended June 30, 2024, the Corporation posted net earnings of $1 million, or $0.01 per common share, compared to net earnings of $22 million, or $0.22 per common share, in the same period of 2023. On an adjusted basis, the Corporation posted net earnings of $8 million in the second quarter of 2024, or $0.08 per common share, compared to net earnings of $26 million, or $0.27 per common share, in the same period of 2023.

Founded in 1964, Cascades offers sustainable, innovative and value-added packaging, hygiene and recovery solutions. The company employs approximately 9,900 women and men across a network of close to 70 facilities in North America.

SOURCE: Cascades Inc.