Cascades’ containerboard business drives Q3 results

Cascades Inc. reported its third quarter 2024 earnings last week, and the company is reporting its containerboard business helped drive stronger sequential results.

The Kingsey Falls, Quebec-based paper and packaging company brought in $1.201 billion in sales compared with $1.18 billion in the previous quarter and $1.198 billion in the third quarter of last year.

Cascades’ operating income also was up quarter over quarter, coming in at $36 million compared with $34 million in the second quarter, but down compared with the same period last year when operating income was $80 million.

Both earnings before interest, taxes, depreciation and amortization (EBITDA) and net earnings are up quarter over quarter, too. Cascades' third quarter EBITDA came in at $140 million compared with $112 million in the second quarter (though down from $161 million in the third quarter of 2023) and its net earnings came in at $27 million compared with $8 million in the second quarter (down from $45 million in the third quarter of 2023).

“We are pleased with our third quarter 2024 performance,” Cascades President and CEO Hugues Simon says. “Sequentially stronger results were driven by our containerboard business, where higher average selling prices and lower production expenses offset the impact of higher raw material costs.”

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In Cascades’ packaging products division, both containerboard and specialty products sales are up year over year as well as from the previous quarter.

The containerboard segment saw $610 million in third-quarter sales compared with $585 million in the second quarter and $593 million in the third quarter last year, while specialty products saw a slight increase, totaling $169 million compared with $167 last quarter and $157 million in the third quarter of 2023.

Containerboard operating income and EBITDA also are up compared with the second quarter.

The segment totaled $24 million in operating income in the most recent quarter compared with $15 million last quarter as well as $90 million in EBITDA compared with $60 million. In the third quarter of 2023, Cascades’ containerboard segment totaled $61 million in operating income and $101 million in EBITDA.

Meanwhile, operating income in the specialty products segment is down slightly from $19 million in the second quarter to $17 million in the third quarter, but up from $13 million in the third quarter of 2023.

“Specialty products results were stable, with stronger selling prices fully mitigating raw material cost and sales mix headwinds,” Simon says.

“[However,] as forecasted, third quarter tissue papers results were lower than the previous quarter due to higher average raw material costs and lower pricing related to the expected changes in the mix of products sold.”

Cascades’ tissue papers segment sales, however, are down overall. The segment totaled $390 million in sales in the third quarter compared with $397 in the second quarter and $422 million in the third quarter last year, and both operating income and EBITDA are down from the previous quarter as well as from last year.

“We expect fourth quarter results in each of our packaging business segments to be stable sequentially, as benefits from lower raw material costs and previously announced selling price increases will be offset by lower seasonal volumes. In tissue papers, slightly stronger sequential results are expected to benefit from lower average raw material costs, slightly stronger volumes and selling price increase tailwinds offset by the impact from seasonal changes in sales mix.

“As we look toward the medium and longer-term, we are focused on growing sustainable value for shareholders. Central to this is driving and capturing efficiency across our operational platforms, most notably by the ongoing scale-up of production at our Bear Island facility and ramp-up of our recently installed tissue converting lines. Prioritizing these areas, in conjunction with leveraging additional production capacity in all our facilities through numerous efficiency optimization initiatives, will drive cash flow generation and debt reduction, both of which are key action areas across the company.”

Cascades full third quarter 2024 earnings report is available online.