Cascades, Inc. ends 2016 on a positive note despite weak Q4

MONTREAL (Scrap Monster): Cascades Inc. has announced the unaudited financial result of final three months and the fiscal year ended December 31, 2016. The company has reported increased sales and net earnings during the year. The sales declined during the last quarter of the year, when compared with Q3. Net earnings too posted decline during the quarter.

According to company press release, it reported sales of $979 million during Q4 2016, down by 4% when matched with the sales of $1,021 million in Q3 2016. The sales remained more or less stable when compared with $975 million in Q4 2015. The adjusted OIBD excluding specific items totaled $82 million, significantly down by 20% from $103 million in Q3 2016 and by 21% from $104 million in Q4 2015. The net earnings per common share halved from $0.32 in Q3 2016 to $0.16 in Q4 last year. The OIBD including specific items totaled $83 million, considerably down by 15% when compared with $98 million in Q3 2016.

Also, Cascades Inc. reported sales of $4,001 million during the entire year 2016, 4% higher when matched with the sales of $3,861 million in 2015. The adjusted OIBD excluding specific items totaled $403 million, modestly down by 5% from $426 million in 2015. The net earnings per common share increased from $1.18 in 2015 to $1.21 in 2016. The OIBD including specific items totaled $413 million, considerably higher by 20% when compared with $343 million in 2015. The net earnings per share, including specific items, stood at $1.42 during the whole of 2016.

Mr. Mario Plourde, President and Chief Executive Officer noted that the company is pleased to have finished the financial year on a positive note, despite the poor performance during the fourth quarter. The lower-than expected Q4 results was mainly on account of lower volumes due to maintenance downtime at its tissue and containerboard segments. The yearly sales remained stable, mainly on the back of ramped-up sales from recovery and recycling activities. Also, Containerboard Packaging and Specialty Products groups reported better yearly volumes in 2016. However, European markets extended their weakness, Plourde said.

The 6% year-on-year growth in sales of North American operations was able to offset the 4% sales decline in Europe during 2016. The drop in adjusted operating income is mainly due to weakness in European operations. This has been impacted by higher investment towards ongoing implementation of ERP platform across all of its facilities. As part of its efforts to increase energy efficiency, Cascades had recently announced investment of $11.3 million in two major projects at its Cabano, Quebec plant.

Cascades Inc. has lowered its net debt by additional 6% during the fourth quarter. The quarterly debt reduction totaled $93 million. With this, the company achieved full-year debt reduction of $189 million, lower by 11% when matched with end-2015 levels.

Going forward, the company plans to complete in 2017, the implementation of ERP platform and other initiatives undertaken to modernize internal processes. Also, corporate investments are expected to remain robust through the end of this year.

Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The Company employs close to 11,000 employees, who work in over 90 production units located in North America and Europe. From a manufacturer of primarily paper and cartonboard, the Corporation has emerged as the largest collector of recyclable materials in Canada, as well as one of the major converters of corrugated packaging products, tissue papers and specialty products in North America.