Cascades Reports First Quarter Profit
May 4, 2006 - Cascades Inc.today reported net earnings of $6 million ($0.07 per share) for the quarter ended March 31, 2006. This compares with net earnings of $0 million ($0.00 per share) or a net loss of $1 million ($0.01 per share) when excluding specific items(1) for the same period in 2005.
- Improved net earnings per share compared to Q4 2005 and Q1 2005 due to
the impact of generally higher volumes and prices in combination with
lower fiber costs and depreciation expenses;
- Continued focus on our asset optimization program:
- The restructuring of our fine papers activities including the
closure of one mill, one paper machine and the completion of the
sale of our paper merchant network;
- The closure and redeployment of the Pickering (Ontario) tissue
- Announced acquisitions in the boxboard sector (Sprague mill from
Caraustar and Simkins assets) should lead to better efficiencies going
- Cascades continues to position itself in the fast growing market of
environmentally-friendly products with the launch of its 100 % recycled
tissue product line in Western Canada.
Commenting on the quarterly results, Mr. Alain Lemaire, President and Chief Executive Officer stated: "These results are encouraging given that they were driven by both a series of strategic initiatives and generally improving market conditions. Building on the success of the recent restructuring of the fine papers operations, we intend to continue our focus on Boxboard activities. We will be pleased to welcome new customers and employees with whom we look forward to work with in the future developing new synergies for the benefit of our shareholders."
Three-month period ended March 31, 2006
Given the reclassification adopted in 2006 of the Thunder Bay coated paper mill as a discontinued operation, sales increased 2% during the first quarter of 2006 amounting to $818 million and operating income from continued operations amounted to $31 million as restructuring and closure costs associated with announcements made in 2005 were offset by an unrealized gain on financial commodity instruments. This amount compares to operating income of $20 million achieved for the same period last year. Generally speaking, higher volumes, selling prices and a reduction in fiber costs and depreciation expenses more than offset higher prices for energy and chemical products.
Mr. Alain Lemaire, President and Chief Executive Officer added: "We expect that the seasonal pick up in activity in most of our business segments will positively impact demand in the second quarter. However, we are aware that general business conditions will continue to be challenging given the volatility of the $CA and energy costs, rising interest rates and increased foreign competition. We will continue to manage controllable costs, to focus on our non-performing assets and to integrate our recent acquisitions."
Founded in 1964, Cascades produces, transforms and markets packaging products, tissue paper and fine papers, composed mainly of recycled fibres.
SOURCE: Cascades Inc.