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Cascades shares results for Q4 and full year of 2023

Cascades reports its unaudited financial results for the three-month period and fiscal year ended December 31, 2023.

Q4 2023 highlights

• Sales of $1,138 million, compared with $1,198 million in Q3 2023 and $1,135 million in Q4 2022;
• Operating loss of $24 million, compared with operating income of $80 million in Q3 2023 and operating loss of $20 million in Q4 2022;
• Net loss per common share of $0.57, compared with net earnings per common share of $0.34 in Q3 2023 and a net loss per common share of $0.27 in Q4 2022;
• Adjusted earnings before interest, taxes, depreciation and amortization EBITDA A of $122 million, compared with $161 million in Q3 2023 and $116 million in Q4 2022;
• Adjusted net earnings per common share of $0.05, compared with $0.44 in Q3 2023 and $0.22 in Q4 2022.

2023 annual highlights

• Sales of $4,638 million, compared with $4,466 million in 2022;
• Operating income of $40 million, compared with $33 million in 2022;
• Net loss per common share of $0.76, compared with $0.34 in 2022;
• Adjusted earnings before interest, taxes, depreciation and amortization EBITDA A of $558 million, compared with $376 million in 2022;
• Adjusted net earnings per common share of $1.08, compared with $0.37 in 2022;
• Net debt of $1,882 million as of December 31, 2023, compared with $1,966 million as of December 31, 2022. Net debt to EBITDA A ratio of 3.4x, down from 5.2x as of December 31, 2022;
• Total capital expenditures, net of disposals, of $46 million in Q4 2023 and $343 million in 2023. The corporation’s 2024 forecasted net capital expenditures of approximately $175 million are unchanged.

Discussing results for the fiscal year 2023, Mario Plourde, president and CEO, commented, “We are pleased with our strong annual performance in 2023, with our operations generating a four percent increase in sales and a 48 percent increase in EBITDA A levels compared to the prior year. Our Tissue Papers segment drove these stronger results, generating $182 million of EBITDA A in 2023, a significant improvement from last year that reflects the hard work done over the past two years.”

“In the fourth quarter of 2023, our Tissue Papers and Specialty Packaging businesses generated good results, meeting expectations. We are pleased with the continued strong performance of our Tissue segment, which generated an EBITDA A margin of 15.6 percent in the quarter, a testament to the benefits derived by the significant repositioning and profitability initiatives that have been implemented across this business. The Containerboard segment continued to deliver solid volume of corrugated converted products. However, fourth-quarter results in this segment were below expectations. Sequential performance of this business was impacted by lower average selling prices, higher costs and lower parent roll shipments, the latter of which underscores this segment’s lower integration rate and also reflects the planned 49,000 short tons of maintenance and economic downtime taken during the period. Notwithstanding lower consolidated profitability, we reduced our net debt levels due to strong cash flows from operations and lower capital expenditures during the quarter. Consequently, our leverage ratio¹ improved to 3.4x from 3.8x at the end of Q3,” added Plourde.

He continued, “On a consolidated basis, we are forecasting that our results in the first quarter of 2024 will decrease sequentially. This is driven by lower expected results in our containerboard segment due to higher raw material costs, slightly lower average selling prices and lower production levels to manage inventory following softer demand in the fourth quarter. Along with the strategic investments made in recent years, these factors contributed to our decision to permanently remove higher-cost capacity from our manufacturing platform. We continue to implement commercial strategies and cost optimization initiatives to drive profitability in this business while increasing the agility and market responsiveness of our platform. To this end, we are pleased with the ramp-up of our Bear Island facility, and the addition of this top-tier mill to our containerboard mill network augments its competitiveness from an operational, geographic positioning and cost perspective. Results in the Tissue Papers segment are also expected to slightly decrease sequentially reflecting increases in raw material pricing and normal seasonal softness at the beginning of the year, while results in Specialty Packaging are expected to improve thanks to efficiency improvements, notably in the plastics sub-segment. More broadly, while our outlook for volume remains prudent for our packaging businesses in the first quarter given economic uncertainty, benefits from ongoing profitability initiatives will continue to create value across our businesses for Cascades, our customers and our shareholders.”