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Cascades reports $956M in sales for Q2 2021 as tissue market softens

Cascades has reported its second-quarter 2021 financial results, noting that movement in the packaging market helped to mitigate the return of the tissue market to more normal levels.

Sales of $956 million increased one per cent from $943 million in Q1 2021, but decreased by $64 million, or six per cent, compared with the same period last year (Q2 2020 sales were $1.02 billion). This was driven by a less favourable Canadian dollar–U.S. dollar exchange rate, and lower volumes in the tissue segment following very strong retail demand in the year-ago period attributable to COVID-19–driven fluctuations in consumer buying patterns.

This was partially offset by higher pricing and stronger volumes in all packaging segments and in recovery and recycling activities compared to the prior-year period.

The corporation generated an operating income before depreciation and amortization (OIBD) of $87 million in the second quarter of 2021, down from $127 million in the second quarter of 2020.

On an adjusted basis, second quarter OIBD totalled $98 million, a decrease of $45 million, or 31 per cent from the $143 million generated in the same period last year. This decrease is largely attributable to higher raw material costs in all segments, a less favourable exchange rate, lower volumes in tissue and higher production costs in containerboard that included inflationary pressure in labour, transportation and energy.

Additionally, $9 million of R&D tax credits were recorded in the second quarter of 2020, while none was recorded in the current period.

For the 3-month period ended June 30, 2021, Cascades posted net earnings of $3 million, or $0.02 per share, compared to net earnings of $54 million, or $0.57 per share, in the same period of 2020.

On an adjusted basis, the corporation generated net earnings of $8 million in the second quarter of 2021, or $0.07 per share, compared to net earnings of $58 million, or $0.61 per share, in the same period of 2020.

Read the full Q2 2021 Cascades financial report here.