Cascades tissue business falls short in Q4

Despite an increase in sales and operating income in 2025, Kingsey Falls, Quebec-based packaging company Cascades Inc. reports that its fourth-quarter tissue operations were below expectations, and President and CEO Hugues Simon similarly expects softer results sequentially in early months of 2026.

“In addition to efficiency and logistics execution falling short of our targets [in our tissue business], our North Carolina Wagram facility experienced a major electrical outage,” Simon said during an earnings call Feb. 26. “These factors reduced output, increased operational support requirements and required our network volume to be redirected to other plants, increasing logistics costs.”

Overall, Cascades reports $1.2 billion in sales for the fourth quarter of 2025, essentially flat from a year ago, while full-year sales were $4.8 billion in 2025 compared with $4.7 billion in 2024.

The company also boosted its operating income and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). For the fourth quarter, its operating income was $76 million and adjusted EBITDA $155 million, up from $16 million and $146 million, respectively. For the full year, operating income was $235 million and adjusted EBITDA was $576 million in 2025, up from $95 million and $501 million, respectively.

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Cascades reports earnings in three segments: packaging products, tissue papers and corporate, recovery and recycling activities.

In its packaging products segment, the company saw an overall boost in operating income, coming in at $90 million in the fourth quarter and $269 million for the full year. Comparatively, in 2024, its packaging products segment posted $145 million for the full year and $58 million for the quarter.

However, because of the logistical shortcomings and the electrical outage at its tissue converting site in North Carolina, Cascades’ operating income was down to $93 million in 2025 compared with $97 million in 2024 and dropped more than 50 percent from the third quarter of 2025 to the fourth quarter.

Meanwhile, the company says its Bear Island facility continued to see solid production levels, mitigating the expected lower seasonal sales volumes.

The Bear Island recycled containerboard mill in Ashland, Virginia, averaged 88 percent total capacity in the fourth quarter while increasing production levels of lower basis weight paper by 7 percent sequentially, which Simon said is a key differentiating factor from an industry perspective.

“We do continue to see this positive operational pace in early 2026,” he added.

Looking ahead, Simon said Cascades is expecting consolidated results to decrease sequentially but increase year over year for the sixth consecutive quarter. The company plans to take approximately 16,000 tons of downtime across its packaging platform in the first quarter of 2026, including at Bear Island.

“Raw material and selling price trends are expected to remain largely stable, while energy and logistics costs will be headwinds following the challenging weather in early 2026,” Simon added. “[The] sequential decrease we’re forecasting in tissue is driven by lower seasonal demand, mainly in away-from-home, and impacts stemming from the severe weather in the U.S. early in 2026.

“We’re very happy with the quarter in packaging and … we have some work to do in tissue. We did the actions that we had to do. We’re looking forward to the 2026 quarters, which is going to bring its own share of interesting things, given what the geopolitical is doing.”

Cascades full earnings report can be found online.