Mercer International Posted Net Loss of $3.4 Million

SEATTLE (Scrap Monster):  Mercer International Inc. reported results for the initial quarter of 2020.

The company press release said that it reported net loss of $3.4 million in Q1 this year. This compares with net income of $51.6 million in the prior year quarter. The operating EBITDA recorded sharp decline from $123.8 million in Q1 last year to $57 million. As at the end of the quarter, the company reported total liquidity of $516.5 million, including cash on hand and available credit facilities.

The pulp segment operating income witnessed notable year-on-year decline from $93.5 million to $21.4 million, primarily due to lower pulp sales realizations. The lower costs at German mills resulted in lower per unit fibre costs during the quarter, falling by nearly 12% from the prior year quarter. Meantime, the wood products segment operating income surged to hit record level of $5.6 million in Q1 this year. The production totalled 116.4 MMfbm of lumber during the quarter.

Mercer International foresees steady pulp demand from tissue manufacturers, whereas the demand from printing and writing paper producers are expected to remain subdued. The curtailed production on account of fiber shortage and planned maintenance will impact pulp supply in Q2. Furthermore, it expects weakened lumber markets and lower lumber sales realizations in the upcoming quarter.

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