Free Pulp & Paper News Email. Subscribe Now!
0
KINGSEY FALLS, QC, Nov. 9, 2017 ---- Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended September 30, 2017.

Q3 2017 Highlights

Sales of $1,103 million
(compared to $1,130 million in Q2 2017 (-2%) and $1,021 million in Q3 2016 (+8%))
As reported4 (including specific items)
Operating income of $51 million
(compared to $48 million in Q2 2017 (+6%) and $50 million in Q3 2016 (+2%))
Operating income before depreciation and amortization (OIBD)1 of $104 million
(compared to $104 million in Q2 2017 and $98 million in Q3 2016 (+6%))
Net earnings per common share of $0.35
(compared to net earnings of $2.70 in Q2 2017 and net earnings of $0.21 in Q3 2016)
Adjusted (excluding specific items)1
Operating income of $53 million
(compared to $51 million in Q2 2017 (+4%) and $55 million in Q3 2016 (-4%))
OIBD of $106 million
(compared to $107 million in Q2 2017 (-1%) and $103 million in Q3 2016 (+3%))
Net earnings per common share of $0.20
(compared to net earnings of $0.25 in Q2 2017 and net earnings of $0.32 in Q3 2016)
Announced construction of a new US$80 million state of the art corrugated packaging plant in Piscataway, New Jersey.
Announced the closure of our Maspeth, New York, packaging plant. Property put up for sale for US$72 million.
Net debt2 of $1,469 million as at September 30, 2017 (compared to $1,780 million as at June 30, 2017) and net debt to adjusted OIBD ratio2 at 3.6x on a pro-forma basis3 (compared to 4.2x as at June 30, 2017 on a pro-forma basis3).

1


OIBD = Operating income before depreciation and amortization.

2


For further details, please refer to the "Supplemental Information on non-IFRS Measures" section.

3


Pro-forma basis to include Greenpac on a LTM basis.

4


The purchase price allocation of Greenpac was finalized during the third quarter of 2017. The preliminary estimated deemed consideration of $371 million was revised to $304 million. This change impacted the calculation of the gain on the deemed disposal of the previously held interest and goodwill allocated in the purchase price determination for an amount of $67 million. Adjustments to the preliminary purchase price allocation were recorded retrospectively to the acquisition date as required by IFRS 3. Net earnings per common share disclosed in the second quarter were consequently adjusted to $2.70 per common share from $3.41 per common share (please refer to Note 4 of the 2017 third quarter unaudited condensed interim consolidated financial statements for more details).



Mr. Mario Plourde, President and Chief Executive Officer, commented: "We delivered improvements in consolidated reported operating income year-over-year during the third quarter in what was a challenging environment, due to disruptions by the hurricanes and increasingly difficult market conditions in the tissue sector. Strategically, we are confident that the plan we are implementing step by step, and which is focused on improved profitability through increasing integration, modernizing our manufacturing facilities and improving logistics by optimizing our geographic footprint, will provide our business segments with the platform to more successfully execute in times of increased business headwinds.

Looking at the performance of our business sectors, our Containerboard segment increased both sales and operating income year-over-year during the third quarter. This reflects the consolidation of Greenpac results beginning in the second quarter, higher selling prices following the final deployment of announced price increases, and a more favourable sales mix. These benefits were partially offset by higher raw material prices year-over-year, and the foreign exchange impact related to the appreciation of the Canadian dollar. Results similarly reflect slightly lower volumes that are attributable to North American transport grid disturbances following inclement weather combined with short-term inefficiencies following the final deployment of our new centralized transportation processes.

The lower results generated by our Tissue segment during the quarter reflect several factors. Key among these were higher raw material prices, a less favourable sales mix, lower volumes due to additional capacity coming to the market, higher transportation costs, weather-related network disruptions, and a lower than anticipated contribution from the Oregon converting plant due to slower market penetration.

The European Boxboard segment performed well during the quarter, with year-over-year results reflecting the stronger economic environment, improvements in volumes and average selling prices coupled with lower maintenance and energy costs, the benefits of which more than offset the negative impact of higher raw material prices. Finally, third quarter results from our Specialty Products segment declined slightly year-over-year. This reflects a lower contribution from recovery and recycling activities related to the appreciation of the Canadian dollar, higher raw material costs most notably resin, and slightly lower volumes, the effects of which were only partially offset by higher selling prices in industrial and consumer products.

At the corporate level, we are pleased with the progress of our internal transformation initiatives and ERP system implementation, which we expect will be finalized by the end of the year, as planned, after which we will turn our focus toward optimization. We are similarly pleased with the advancements made in our strategic plan, which include the solidifying of our Containerboard platform in the Northeastern US via the closure of our New York packaging plant and planned sale of the related property, and construction of a new state of the art containerboard converting facility in New Jersey. Finally, we have continued to make progress on our commitment to decrease our leverage ratio to within a range of 3.0x - 3.5x, which, when including results from Greenpac over the last 12 months, now stands at 3.6x on a pro-forma basis."

Comments

PaperIndex Times is Powered by