Cascades reports solid performance in Q3 2019
Cascades has released its financial results for the three-month period ended September 30, 2019, citing sales of $1,264 million (a decrease of one per cent compared with $1,275 million in sales in Q2 2019, but an increase of eight per cent over sales of $1,175 million in Q3 2018).
The company shared an as-reported operating income of $135 million compared with $82 million in Q2 2019 (+65 per cent) and $78 million in Q3 2018 (+73 per cent). Operating income before depreciation and amortization (OIBD) was $208 million compared with $154 million in Q2 2019 (+35 per cent) and $139 million in Q3 2018 (+50 per cent).
Net earnings per share were $0.74 compared with $0.33 in Q2 2019 and $0.38 in Q3 2018.
Adjusted operating income was $88 million compared with $84 million in Q2 2019 (+ five per cent) and $76 million in Q3 2018 (+16 per cent).
Adjusted OIBD was $161 million compared with $156 million in Q2 2019 (+three per cent) and $137 million in Q3 2018 (+18 per cent).
Adjusted net earnings per share were $0.30 compared with $0.28 in Q2 2019 and $0.40 in Q3 2018.
“Cascades delivered solid consolidated third quarter 2019 results, as demonstrated by the 24.9 per cent OIBD margin realized by the Containerboard segment,” says Mario Plourde, president and chief executive officer, in a release. “In addition to our improved execution at the operational level, we benefited from favourable raw material pricing and customary seasonal demand levels across our platforms, notwithstanding some softness in Containerboard and European Boxboard end-pricing. The Tissue segment delivered very encouraging year-over-year and sequential financial improvements, with positive raw material costs and selling price levels providing additional support for the benefits being derived from ongoing growth investments and initiatives in this segment.
“We concluded the acquisition of the Orchids activities during the third quarter, and subsequently announced, at the end of October, the closure of two tissue converting facilities in the U.S. by March 2020, as part of our strategic repositioning and optimization efforts in the Tissue segment. In a similar vein, we advanced our capital investments and projects across our operations, and continued to align our Specialty Products platform with the company’s longer-term strategic objectives via the sale of our European industrial packaging operations.”
“After nine months, the company is well positioned to generate solid annual adjusted OIBD in 2019, with results after the first three quarters 15 per cent above full year 2017 performance and already equal to 92 per cent of full year 2018 adjusted OIBD performance. On a consolidated basis we expect fourth quarter results to improve year-over-year, with operational enhancements in tissue and favourable raw material pricing mitigating the usual seasonal trends across our business platforms.
“On a segmented basis, near-term results in Containerboard are expected to decrease sequentially and be stable year-over-year reflecting a combination of usual seasonality and market dynamics. Tissue results are expected to show important year-over-year improvements in the fourth quarter, while sequential performance will be down reflecting the usual seasonal trends. European Boxboard performance is expected to slightly decrease sequentially but improve year-over-year as a result of lower raw material costs and a modest recovery in volume. Lastly, we anticipate stable results in Specialty Products year-over-year and a slight decrease sequentially, as the impact of lower recycled fibre prices on recovery operations and seasonality in packaging are expected to be offset by stable selling prices and beneficial raw material costs in packaging.”
Read the full Q3 2019 Cascades financial report.