Cascades has reported second quarter results that “exceeded expectations”, as its tissue sector results are reported ahead of expected range.
The corporation’s second quarter sales of $1,219m increased by $32m compared with the same period last year, a result of consolidated net benefits of $13m from higher average selling prices and a favourable sales mix of $21m.
However, these factors were partially offset by a $2m impact from lower volumes, mainly in the packaging products segment, reflecting the impact of business closures and dispositions in previous quarters.
Second quarter operating income was $58m, compared with $81m in Q1 2026 and $36m in Q2 2025, while second quarter EBITDA (A)1 totalled $140m, an increase of 2%, from the $137m generated in the same period last year.
Cascades said this was driven by higher volumes, higher average selling prices and cost reduction initiatives across the corporation’s businesses.
Hugues Simon, President and Chief Executive, said: “Our second quarter results exceeded expectations, driven by a stronger performance in packaging, reflecting continued solid production and demand levels across our paper mill network, meaningful progress in onboarding new customers and a more favourable economic environment than initially anticipated.
“Packaging volumes tracked ahead of our forecasted assumptions, contributing to stronger profitability in the quarter.
“In tissue, the results came in slightly ahead of our expected range. Performance benefited from improved productivity and sales volumes and the positive impact of ongoing cost reduction initiatives.
The operational improvements achieved over the past several quarters are translating into greater efficiency and a stronger cost structure across the business.
“Overall, our leverage ratio remained stable during the quarter, while net debt decreased modestly despite unfavourable exchange rate movements.
“On 20 July 2026, the US administration announced new tariffs on a number of products imported into the United States and we are conducting an assessment of the potential impact on our operations.
“Based on information currently available, certain tissue and packaging products exported to the United States could be subject to the announced 50% tariffs.
“While this represents a notable development, we believe the potential impact is manageable.
“We are actively pursuing several tactical initiatives that we expect will materially mitigate the potential financial impact of these tariffs over the coming months. In addition to the direct effects of this announcement, some customers whose products are subject to these tariffs may experience weaker demand or reduce production levels, which could negatively affect volumes in certain segments.
“Based on our current assessment and the mitigation actions underway, we remain confident in our ability to successfully manage these challenges.
“Looking ahead, this situation does not change our confidence in the earnings trajectory of the business.
“Supported by our ongoing profitability improvement initiatives and the momentum we continue to see across our operations, and excluding the potential impact of the announced tariffs, we now expect annual run-rate Adjusted EBITDA to exceed $600m during the second half of 2026, surpassing our original objective.
“The implementation of previously announced selling price increases in both packaging and tissue is progressing as planned.”
In packaging, the recent $50 per ton price increase announced in June is expected to further strengthen earnings momentum.
He said: “This confidence reflects the significant work completed over the past several quarters to make Cascades a more resilient and agile organisation.
‘Through operational excellence initiatives, cost optimisation efforts and disciplined capital allocation, we have strengthened our ability to respond effectively to changing market conditions and navigate a period of heightened geopolitical uncertainty.
“We are also closely monitoring developments in the Middle East. Continued instability has increased volatility in energy markets, and sustained increases in oil prices could create additional inflationary pressures on transportation, manufacturing and other operating costs.
