Cascades reports strong Q1 2019

Most segments improved, but recovery and recycling negatively impacted sales performance by $7 million year-over-year.

© Kheng Guan Toh - Dreamstime.com

© Kheng Guan Toh - Dreamstime.com

Cascades Inc., Kingsey Falls, Quebec, has released its unaudited financial results for the three-month period ended March 31, 2019. 

According to a news release from Cascades, the company achieved $1.23 billion in sales in the first quarter of 2019 compared with $1.2 billion in the fourth quarter of 2018 and $1.1 billion in the first quarter of 2018. First-quarter 2019 sales increased by $132 million, or 12 percent, compared with first-quarter 2018 sales.

Cascades reports the increase reflects improvements in all business segments, most notably a $43 million, or 14 percent, increase in the tissue products segment that was driven by improved average selling price, a more favorable exchange rate and a better sales mix.

Lower results from the recovery and recycling subsegment were impacted by price erosion of recycled material. Cascades reports that this subsegment has negatively impacted sales performance by $7 million year-over-year.

Additionally, the company generated an operating income before depreciation and amortization of $139 million in the first quarter of 2019, which compares with the $167 million generated in the same period last year that included the $66 million gain related to the sale of the land and building of Cascades’ Maspeth, New York, containerboard converting facility. 

Mario Plourde, president and chief executive officer at Cascades, says the company was pleased with its first-quarter operational performance, with all of its business segments generating solid results that were “in line with or above expectations.” 

Plourde notes that the containerboard packaging segment performed well, despite an environment of “softer industrywide demand and capacity utilization levels,” as well as slight decreases in light of index pricing levels during this quarter. He says, “While volumes were down sequentially, we maintained profitability levels in this segment as a result of low raw material prices and improvements to sales mix, which drove higher average selling prices.”

Plourde reports that European boxboard, through the company’s equity position in Reno de Medici S.p.A., generated strong sequential results during the period that reflected business acquisitions, lower average raw material prices and higher average selling prices. Also, the specialty products segment generated improved sequential results in the first three months of the year. “This was driven by recent business acquisitions and better performance in all packaging subsegments, the benefits of which offset a lower contribution from the recovery subsegment attributable to lower recycled fiber prices,” Plourde says. 

Additionally, Plourde says the company was pleased with its sequential improvement generated by its tissue papers segment. The segment achieved higher average selling prices because of improved sales mix and the implementation of price increases, as well as lower raw material prices and lower production costs.

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