Clearwater: 2Q result expectations met despite “competitive tissue market and high pulp prices”

Clearwater Paper Corporation has reported net sales for the second quarter of 2018 up 0.6% year-on-year to $432.1m.

Net earnings were $7.0m, down from $8.0m in 2017, due to “a weaker product mix in tissue products, higher input costs for transportation, wood fibre, and external pulp and reorganisation expenses”.

This was partially offset by improved price and shipment volumes for paperboard, no planned major maintenance and lower expense associated with profit dependent accruals.

EBITDA was $42.4m compared with $45.7m for the second quarter of 2017.

Adjusted EBITDA was $42.6m, down 5.4%.

Linda K. Massman, president and chief executive, said: “We met our expectations in the second quarter due to record paperboard production and shipments, continued strong demand for paperboard and ultra-quality tissue, and cost savings from strategic capital and operational efficiency initiatives.

“Those results were achieved in spite of a competitive tissue market, and high external pulp prices and transportation costs.

“For the second half of 2018, we are acutely focused on improving operating profit, generating cash, completing the expansion work at our Shelby, North Carolina facility and optimising our network of assets
to reduce costs and improve service to customers.”

In its consumer products division, net sales for the second quarter were $221.6m, down 4.5%.

The company said this decrease was “due primarily to lower prices and weaker product mix”.

Operating loss for the second quarter of 2018 was $3.6m, compared to operating income and margin of $10.7 million and 4.6% respectively, in the second quarter of 2017.

Adjusted EBITDA for the segment was $11.6m, down from $27.7m, due to “lower average selling prices, the absorption of fixed costs over lower volumes of retail shipments and higher transportation costs”.

Total tissue volumes sold were 90,386 tonnes in the second quarter of 2018, a decrease of 1.2% compared to 91,450 tonnes in the second quarter of 2017.

Converted product cases shipped were 12.0m in the second quarter of 2018, 5.4% lower than the 12.7m cases shipped in the second quarter of 2017.

Average tissue net selling prices decreased 3.2%, or $82 per tonne, to $2,451 per tonne in the second quarter of 2018, compared to $2,533 per tonne in the second quarter of 2017, primarily due to product mix.

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