Cascades Inc. has reported its unaudited financial results for the three-month period ended March 31, 2023.
Q1 2023 Highlights:
- Sales of $1,134 million (compared with $1,135 million in Q4 2022 and $1,038 million in Q1 2022)
- Operating loss of $(80) million (compared with $(20) million in Q4 2022 and $(4) million in Q1 2022)
Mario Plourde, President and CEO, commented: "We had a solid first quarter. All three businesses contributed to topline growth year-over-year, as benefits from higher selling prices and an advantageous exchange rate more than offset the impacts of a less favourable mix in Containerboard and lower volumes in Tissue Papers and Specialty Products. Higher sales, notably in Tissue, and lower raw material costs in our packaging businesses drove higher consolidated profitability levels. Sequentially, sales were stable, with stronger volumes in all businesses counterbalancing the impacts of less favourable sales mixes in Containerboard and Tissue and lower selling prices in our packaging businesses. Containerboard results include the final insurance settlement payment of $7 million related to water effluent treatment issues that occurred at our Niagara Falls, NY complex in mid-2021, bringing the insurance settlement total to $12 million.
"We announced an important repositioning of our Tissue Papers operational platform at the end of April. This decision, which was not taken lightly due to its impact on our work force, is the culmination of an in-depth evaluation of the long-term positioning, competitiveness and performance potential of our tissue operations following disappointing results in recent years. Market conditions in this business have changed significantly, and the closure of these underperforming assets will strengthen not only the operational performance of this business, but its financial and environmental performance as well."
"In our Containerboard segment, we are very pleased to have announced that the Bear Island facility produced its first containerboard roll at the beginning of May. We provide more details on these positive announcements and what they mean for Cascades' longer-term objectives in our updated 2022 - 2024 Strategic Plan released today. From a consolidated perspective, our 2024 revenue target of approximately $5 billion remains unchanged, and our EBITDA (A) and free cash flow objectives have been slightly modified to reflect the announced changes to our operational platform and updated market forecasts. As a result of the lower cash generation levels of 2022 and higher Bear Island project cost, the Corporation has adjusted its leverage ratio objective to 2.5x to 3.0x by year-end 2024. The Corporation's capital allocation priorities will focus on debt repayment while limiting capital expenditures to 4% of revenues through 2024. Combined, this focus will support the Company's mid-term leverage ratio objective of 2.0x to 2.5x ."
Discussing near-term outlook, Mr. Plourde commented, "On a consolidated basis, we are expecting slightly lower results in the second quarter”.