Cascades Inc. released its 2023 fourth quarter and full-year results, and as has been the case with other paper and packaging companies, reports figures from its containerboard business that were “below expectations.”
However, the Kingsey Falls, Quebec-based company saw strong results in its tissue and specialty packaging businesses, which Cascades says is a testament to the benefits of its significant repositioning and profitability initiatives implemented across its tissue segment, specifically.
“We are pleased with [the] solid performance and the turnaround of our tissue business in particular, where favorable market conditions and our wide-ranging profitability initiative successfully repositioned this business operation and equipped it to generate an EBITDA [earnings before interest, taxes, depreciation and amortization] of $182 million in the year,” Cascades CEO Mario Plourde said during the company’s fourth-quarter earnings call Feb. 22.
Overall, Cascades reports $4.64 billion in sales in 2023 compared with $4.47 billion in 2022, and adjusted EBITDA of $558 million compared with $376 million. While its net earnings in 2023 were $109 million compared with $37 million in 2022, the company posted a loss of $76 million in net income compared with a loss of $34 million last year.
In the fourth quarter, Cascades’ sales were flat year over year at $1.14 billion, but down slightly from nearly $1.2 billion in the third quarter of 2023. The company also reports a $24 million loss in operating income in the fourth quarter and a $57 million loss in net income.
“On a consolidated basis, sales were stable year over year, while adjusted EBITDA of $122 million rose 5 percent from the prior year,” Plourde said of the fourth quarter. “Pricing was a headwind for top line performance, the effect of which were offset by stronger volume.”
Both containerboard and tissue papers sales were essentially flat year over year, but on the containerboard side, Cascades reports $561 million in sales in the fourth quarter compared with $593 million in the third quarter, and its tissue papers business generated $713 million in the fourth quarter compared with $743 million in the third quarter.
Cascades also provided an update on the ramp-up of its Bear Island recycled containerboard mill in Ashland, Virginia, which officially began operations in May 2023 after a more than two-year conversion from newsprint to containerboard.
Charles Malo, president and chief operating officer of containerboard packaging at Cascades, confirmed the mill is above its ramp-up production and has been testing the percentage of mixed paper it can use in its feedstock, going as high as 30 percent which Malo said is not the maximum it can use.
“We want to make sure that we do it properly, making sure that we check the quality of the product and following the ramp-up,” he said of using mixed paper. “We have the flexibility with the investment that we made to [go] a bit higher than 60 percent.”
“With Bear Island ramping up and recent investments in our converting facility, our operating platform is more agile, more competitive and better positioned, regardless of economic backdrop,” Plourde added. “We are focused on generating benefits from its increased agility and market responsiveness.”
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