Cascades has reported a sequential improvement in its Q3 tissue results, as well as good packaging market dynamics that have “partially mitigated” continued inflationary costs pressures.
For the three-month period ended 30 September, sales of $1,030m were up 8% compared to the second quarter of 2021, and up 2% year-on-year.
Operating income of $73m was up 217%) compared to the second quarter, and up 35% in the year-ago period.
The company’s move to exit the Boxboard Europe segment by selling its 57.6% equity stake in RDM Group (Reno De Medici) closed on 26 October.
Mario Plourde, President and Chief Executive, said: “Our third quarter performance reflects the ongoing dynamic nature of the North American macro environment and the announced production impact in our containerboard segment related to water effluent treatment system issues at our Niagara Falls complex.
“We are encouraged with our results given this context, and with the sequential improvement in our tissue business.
“We continued to see inflationary pressures on input costs, notably raw materials, but also in labour, transportation and energy, across our operations in the third quarter, the effects of which were partially offset by the roll-out of announced price increases and our continued cost management initiatives.”
On the tissue side, he said that demand and pricing trends were more positive sequentially, while higher input costs, notably raw materials and transportation remained headwinds.
He added that the company’s exit from European boxboard markets was part of its focus to reinforce its financial flexibility.
Plourde forecast “sequentially stable results for the fourth quarter, with the impact of inflationary pressures on input costs largely mitigated by steady demand and the roll-out of price increases in our business segments”.
“Considering usual seasonal softness, we are forecasting results and demand levels in our tissue papers segment to be stable sequentially, with continued benefits from the ongoing roll-out of sales price increases countering higher raw material prices and pressures on costs.”