Financial Reports & Markets
Mercer International reports improvements in Q4 20 over year ago
February 17, 2021 By Mercer International/P&PC Staff
Mercer International has reported its operating EBITDA increased to $49.5 million in Q4 2020 from negative $34.2 million in Q4 2019 and $45.6 million in Q3 2020.
In the fourth quarter of 2020, net loss was $13.0 million (or $0.20 per share) compared to a net loss of $72.7 million (or $1.11 per share) in the fourth quarter of 2019 and net income of $7.5 million (or $0.11 per share) in the third quarter of 2020.
In 2020, operating EBITDA decreased by eight per cent to $192.7 million from $210.4 million in 2019 and the net loss was $17.2 million (or $0.26 per share) compared to $9.6 million (or $0.15 per share) in 2019.
“All of our mills ran well in the fourth quarter. Our Rosenthal and Peace River mills successfully and safely completed a total of 16 days of annual maintenance downtime,” says David Gandossi, chief executive officer of Mercer International, in a statement.
“Our recent capital investment in our Friesau sawmill continues to pay dividends in the form of record quarterly operating income of $12.9 million in the fourth quarter.
“Our fourth quarter results are highlighted by improved pulp pricing and moderately lower fibre costs, as well as steady production. Fourth quarter average European NBSK list prices were up $40 per ADMT, and average net prices in China were up $65 per ADMT compared to the third quarter. Pulp market fundamentals continued to improve in the fourth quarter allowing us to achieve record sales volumes.
“Our wood products segment had record operating results this quarter and benefited from strong demand and robust pricing in the U.S. market. In the current quarter approximately 56 per cent of lumber revenues and 37 per cent of our lumber sales volumes were to the U.S. which was our single largest market.
“In the first quarter of 2021, our pulp mills have 20 days of planned annual maintenance downtime (approximately 27,600 ADMTs).
“In January 2021, we issued $875 million of 5.125 per cent senior notes due 2029 to refinance and repay all $250 million of our 6.5 per cent senior notes due 2024 and all $550 million of our 7.375 per cent senior notes due 2025. This transaction reduces our cost of capital and extends the maturity of our senior note debt to 2026 at the earliest. After giving effect to the transaction, going forward it will reduce our annual interest expense by approximately $12 million.
“While I am pleased that COVID-19 vaccines are beginning to be administered globally, it will be some time before the pandemic is behind us. In late 2020, there was a second wave in reported infections in Europe, the United States and Canada, as well as the emergence of new variants of the virus. As such, we remain committed to maintaining measures and procedures to operate our business safely and efficiently and protect our people.
“Looking ahead to 2021, we are encouraged by the improving fundamentals in pulp demand and markets and continued price increases implemented in 2021 to date. Along with continuing strong lumber markets and our ample liquidity position, we are positioned well to execute our strategic plan in 2021.”
Read the full Mercer International Q4 2020 financial report here.
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