Cascades Reports Third Quarter 2012 Results

Nov. 8, 2012 (Press Release) - Cascades Inc. a leader in the recovery and manufacturing of green packaging and tissue paper products, announces its financial results for the three-month period ended September 30, 2012.

Q3-2012 Financial Highlights

Sales of $906 million (compared to $944 million in Q2-2012 (-4%) and $947 million in Q3-2011 (-4%))

Excluding specific items:

  • EBITDA of $78 million (compared to $84 million in Q2-2012 (-7%) and $79 million in Q3-2011 (-1%))
  • Net earnings per share of $0.07 (compared to net earnings of $0.08 in Q2-2012 and a net loss of $0.02 in Q3-2011)

Including specific items:

  • EBITDA of $83 million (compared to $77 million in Q2-2012 (+8%) and $53 million in Q3-2011 (+57%))
  • Net earnings per share of $0.05 (compared to net earnings of $0.08 in Q2-2012 and a net loss of $0.21 in Q3-2011)
  • Net debt of $1,542 million (compared to $1,585 million as at June 30, 2012), including $147 million of non-recourse debt
  • Price increase announcement in our containerboard sector

Strategic and Financial Initiatives:

  • Major investments in several of our folding carton and microlithography plants and announcement of the closure of the Lachute (Québec) folding carton plant
  • Permanent closure of the napkin plant located on McNicoll Street in Toronto
  • Greenpac project machine installation proceeding as planned with expected start-up in July 2013
  • Extension and amendment of existing revolving credit facility resulting in lower interest costs
  • Establishment of a Small Shareholder Program for registered shareholders

Mr. Alain Lemaire, President and Chief Executive Officer, had the following comments on the third quarter results and near-term outlook:

"The results for our third quarter did not meet our expectations due to a strong Canadian dollar, operational issues, higher recycled office paper costs and a stronger seasonal decline in activity level in Europe.

"Our Tissue Papers Group continued to contribute positively but was impacted by the increase in the average cost of its raw materials, namely white grades recycled papers.

"Our Specialty Products Group posted stable results. In Europe, shipments decreased significantly. As previously highlighted, downtimes, which are usual during this period of the year, have been longer in 2012 due to important investments undertaken at certain mills and lower order inflows.

"Financial results of our Containerboard Group show a sequential increase. However these results should have been better given the decline in recycled paper costs. During the last few quarters, operational problems at two of our manufacturing mills resulted in higher production and external supply costs. Downtime taken in September to address these problems further contributed to subpar performance. As a result, we were not able to fully benefit from the usual seasonality inherent to the third quarter and from more favorable recycled fiber prices.

"In the short term, fundamentals in our sectors are positive. In the containerboard sector, the recent price hike announcement will contribute positively to our results during the next quarter with full implementation in the beginning of 2013. Demand in the tissue papers segment continues to be robust. The European market remains difficult but we are satisfied with progress made to improve our production assets following recent investments. Finally, we do not expect a significant increase in the level of recycled paper prices in the short term. For these reasons, prospects for the current quarter are encouraging despite the inherent seasonality associated with the month of December."

SOURCE: Cascades