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Cascades reports $1.3B in sales in Q1 2020, up from previous quarter

Cascades has reported its unaudited financial results for the first quarter of 2020, citing a solid increase in sales over the previous quarter.

Sales in Q1 2020 were $1,313 million, compared with $1,227 million in Q4 2019 (an increase of seven per cent) and $1,230 million in Q1 2019.

As-reported

Operating income was $90 million, compared with an operating loss of $1 million in Q4 2019 and an operating income of $72 million in Q1 2019.

Operating income before depreciation and amortization (OIBD) was $161 million, compared with $76 million in Q4 2019 and $139 million in Q1 2019.

Net earnings per share were $0.24, compared with net loss per share of $0.27 in Q4 2019 and net earnings per share of $0.26 in Q1 2019.

Adjusted, excluding specific items

Operating income was $90 million, compared with $75 million in Q4 2019 and $68 million in Q1 2019.

OIBD was $161 million, compared with $152 million in Q4 2019 and $135 million in Q1 2019.

Net earnings per share of $0.42, compared with $0.30 in Q4 2019 and $0.14 in Q1 2019.

Summary

“Our first-quarter results are a testament to the dedication and hard work of every one of our employees during these challenging times. We are very proud of their commitment to support our customers and communities by ensuring that our facilities meet the heightened demand for the essential tissue and packaging products we produce,” says Mario Plourde, president and chief executive officer of Cascades, in a statement.

“Within this difficult context, first quarter sales increased seven per cent from the prior quarter. This reflected improvements in all business segments, most notably in Tissue, European Boxboard and specific Specialty Packaging products as a result of consumer buying patterns related to Covid-19 and strategic actions taken in recent quarters.

“Sales growth of seven per cent year-over-year was largely driven by increases in Tissue, which benefited from higher volumes and favourable average selling price, sales mix and exchange rate. Containerboard sales also increased year-over-year, as higher volumes and a beneficial exchange rate offset the impacts from a less favourable sales mix and lower average selling price. Sales in European Boxboard decreased slightly year-over-year largely due to lower average selling prices, while lower sales in Specialty Products reflect a business divestiture and mill closure in 2019.”

Discussing near-term outlook, Plourde says, “At this time, we expect second-quarter performance to be the result of a combination of tailwinds and headwinds in our different business segments.

“Specifically, Tissue results will reflect elevated raw material prices due to higher white recycled grade fibre costs and a greater use of virgin pulp due to lower levels of available recycled material.

“Containerboard margins are also expected to be impacted by higher OCC prices. Volumes in both Tissue and Containerboard are also forecasted to slow sequentially following an easing of the Covid-19 related pantry-stocking trends seen in the first quarter and lower demand levels following business closures.

“Near-term Specialty Product performance is expected to reflect stronger consumer packaging trends, the effects of which should offset softness in industrial packaging. Boxboard Europe results are expected to increase slightly, supported by steady demand and announced industry price increases.

The company has reduced planned capital expenditures to a range of $175 to $200 million for the year, down from $250 million previously.

Read the full Q1 2020 Cascades financial report.