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Management Side
Cascades Reports Results for the Second Quarter of 2025

KINGSEY FALLS, QC (News release) -- Cascades Inc. reports its unaudited financial results for the three-month period ended June 30, 2025.

Q2 2025 Highlights

  • Sales of $1,187 million (compared with $1,154 million in Q1 2025 and $1,180 million in Q2 2024);
  • Operating income of $36 million (compared with $50 million in Q1 2025 and $34 million in Q2 2024);
  • Net loss per common share of ($0.03) (compared with net earnings per common share of $0.07 in Q1 2025 and net earnings per common share of $0.01 in Q2 2024);
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A)1) of $137 million (compared with $125 million in Q1 2025 and $112 million in Q2 2024);
  • Adjusted net earnings per common share1 of $0.19 (compared with $0.13 in Q1 2025 and $0.08 in Q2 2024);
  • Net debt1 of $2,104 million as of June 30, 2025 (compared with $2,216 million as of March 31, 2025). Net debt to EBITDA (A) ratio1 of 3.8x, down from 4.2x as of March 31, 2025;
  • Total capital expenditures, net of disposals of $26 million, totaled $18 million in Q2 2025, compared to $36 million in Q1 2025 and $23 million in Q2 2024. The Corporation's 2025 forecasted capital expenditures before disposals will be approximately $150 million.

Hugues Simon, President and CEO, commented: "Second quarter performance was in line with our forecasts. On a consolidated basis, sequential improvement was underpinned by stronger volumes and selling prices, and lower transportation and energy costs. Packaging results were driven by the implementation of selling price increases and stable shipments. As expected, these were partially offset by higher operational costs per unit attributable to lower operating rates. Operational metrics at Bear Island improved sequentially, with production levels up 8%. This trend has continued into July. Our tissue segment generated stable results sequentially as benefits from improved pricing, sales volume and mix were offset by higher operational costs due to planned shutdowns and maintenance activities. These initiatives were scheduled to improve line efficiencies, support the execution of our retail tissue realignment strategy, and manage inventory in the Away-from-Home tissue market. The Corporation's net debt levels decreased by $112 million sequentially, and leverage contracted to 3.8x from 4.2x at the end of the first quarter. Net of disposals, capital expenditures totaled $18 million in the quarter, and $54 million year-to-date. We now expect full year 2025 levels to be in the range of $150 million, before disposals, down from $175 million previously."

Discussing near-term outlook, Mr. Simon commented, "We are anticipating third quarter performance to be slightly higher sequentially. We remain cautious in packaging, where results are expected to be largely stable as benefits from continued favourable pricing and raw material trends are forecasted to be offset by constrained demand levels. We expect a stronger tissue performance in the third quarter, driven by volume growth and largely stable raw material costs and selling prices. Continued uncertainty in the macro-economic environment may impact future demand levels across North America and our outlook."

1 Some information represents non-IFRS Accounting Standards Financial measures, other financial measures or non-IFRS Accounting Standards ratios which are not standardized under IFRS Accounting Standards and therefore might not be comparable to similar financial measures disclosed by other corporations. Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.

Financial Summary

Selected consolidated information

(in millions of Canadian dollars, except amounts per common share) (unaudited)

Q2 2025

Q1 2025

Q2 2024

Sales

1,187

1,154

1,180

As Reported

Operating income

36

50

34

Net earnings (loss)

(3)

7

1

per common share (basic)

($0.03)

$0.07

$0.01

Adjusted1

Earnings before interest, taxes, depreciation and amortization (EBITDA (A))

137

125

112

Net earnings

19

13

8

per common share (basic)

$0.19

$0.13

$0.08

Margin (EBITDA (A) / Sales)

11.5 %

10.8 %

9.5 %

Net debt1

2,104

2,216

2,093

Net debt / EBITDA (A) ratio1

3.8x

4.2x

4.2x

Segmented sales

(in millions of Canadian dollars) (unaudited)

Q2 2025

Q1 2025

Q2 2024

Packaging Products

763

762

745

Tissue Papers

392

364

397

Inter-segment sales, Corporate, Recovery and Recycling activities

32

28

38

Sales

1,187

1,154

1,180

Segmented operating income (loss)

(in millions of Canadian dollars) (unaudited)

Q2 2025

Q1 2025

Q2 2024

Packaging Products

46

60

34

Tissue Papers

25

24

38

Corporate, Recovery and Recycling activities

(35)

(34)

(38)

Operating income

36

50

34

Segmented EBITDA (A)1

(in millions of Canadian dollars) (unaudited)

Q2 2025

Q1 2025

Q2 2024

Packaging Products

119

109

86

Tissue Papers

38

37

54

Corporate, Recovery and Recycling activities

(20)

(21)

(28)

EBITDA (A)1

137

125

112

1 Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.

Analysis of results for the three-month period ended June 30, 2025 (compared to the same period last year)

The Corporation's second quarter sales of $1,187 million increased by $7 million compared with the same period last year. This increase was driven by consolidated net benefits of $51 million from higher selling prices and $8 million from a more favourable foreign exchange. These were partially offset by $46 million from lower volumes.

The second quarter EBITDA (A)1 totaled $137 million, an increase of $25 million, or 22%, from the $112 million generated in the same period last year. This increase was driven by net benefits of $51 million from higher selling prices and by lower raw material costs of $15 million, mainly in the Packaging Products segment. These were partially offset by net impacts of $23 million from higher production and energy costs and $18 million from lower volumes.

The main specific items, before income taxes, that impacted our second quarter of 2025 operating income and/or net loss were:

  • $23 million of impairment charge on inventory and some equipment related to a closed facility in the United Sates (operating income and net loss);
  • $2 million loss of other items (operating income and net loss);
  • $4 million unrealized loss on financial instruments (operating income and net loss);
  • $1 million loss on repurchase of long-term debt (net loss).

For the three-month period ended June 30, 2025, the Corporation posted a net loss of $(3) million, or ($0.03) per common share, compared to net earnings of $1 million, or $0.01 per common share, in the same period of 2024. On an adjusted basis1, the Corporation posted net earnings of $19 million in the second quarter of 2025, or $0.19 per common share, compared to net earnings of $8 million, or $0.08 per common share, in the same period of 2024.

1 Please refer to the "Supplemental Information on Non-IFRS Accounting Standards Measures and Other Financial Measures" section for a complete reconciliation.

Dividend on common shares and normal course issuer bid

The Board of Directors of Cascades declared a quarterly dividend of $0.12 per common share to be paid on September 4, 2025 to shareholders of record at the close of business on August 21, 2025. This dividend is an "eligible dividend" as per the Income Tax Act (R.C.S. (1985), Canada). During the second quarter of 2025, Cascades purchased no common shares for cancellation.

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