Cascades Reports Earnings for Quarter

Cascades Inc. reported net earnings of $4 million, including and excluding specific items for the quarter ended June 30, 2005. This compares with a net loss of $3 million of $5 million for the same period in 2004.

Commenting on the results, Alain Lemaire, president and CEO, stated: "Despite rising costs and a very strong Canadian dollar, we were able over the course of the last 12 months to improve our results for every quarter when compared to corresponding periods of the previous year. This improvement in profitability is the consequence not only of the Dopaco acquisition, which is in line with our focus on converting, but also, a result of strategic choices we made in regards to the packaging and tissue sectors.

“Notwithstanding this improvement in our results, we will continue to closely monitor the performance of our operating units and, in particular, we will take appropriate corrective measures for those whose performance falls below our expectations."

Sales for the quarter increased by 8 percent during the quarter, amounting to $901 million compared with $831 million for the same period last year. The increase was mainly due to the contribution of business acquisitions realized over the course of the last 12 months and higher prices for certain products.

Lemaire, added: "We are currently confronted with a high Canadian dollar as well as with a steady increase in energy prices which in turn have a major incidence on the cost of freight, chemical products and other raw materials. Furthermore, we are facing increased foreign competition in Canada and Europe, combined with declining demand for certain packaging products and printing papers, with no indication that there will be any significant short-term improvement in business conditions. We will continue to adjust our production levels to meet demand. Furthermore, we will continue to execute our non-core asset divestiture program as well as rationalizing our costs, particularly those related to energy."