Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period and the fiscal year ended December 31, 2017 .
Q4 2017 Highlights
• Sales of $1,082 million (compared to $1,103 million in Q3 2017 (-2%) and $979 million in Q4 2016 (+11%))
• As reported (including specific items) • Operating income of $45 million (compared to $51 million in Q3 2017 (-12%) and $33 million in Q4 2016 (+36%))
• OIBD 1 of $104 million (compared to $104 million in Q3 2017 and $83 million in Q4 2016 (+25%))
• Net earnings per common share of $0.60 (compared to net earnings of $0.35 in Q3 2017 and net earnings of $0.04 in Q4 2016)
• Adjusted 2 (excluding specific items) • Operating income of $46 million (compared to $53 million in Q3 2017 (-13%) and $32 million in Q4 2016 (+44%))
• OIBD of $105 million (compared to $106 million in Q3 2017 (-1%) and $82 million in Q4 2016 (+28%))
• Net earnings per common share of $0.14 (compared to net earnings of $0.20 in Q3 2017 and net earnings of $0.16 in Q4 2016)
• US 2017 tax reform reduces future tax liabilities by $57 million
2017 Annual Highlights
• Sales of $4,321 million (compared to $4,001 million in 2016 (+11%))
• As reported (including specific items) • Operating income of $175 million (compared to $221 million in 2016 (-21%))
• OIBD of $390 million (compared to $413 million in 2016 (-6%))
• Net earnings per common share of $5.35 (compared to net earnings of $1.42 in 2016)
• Adjusted 2 (excluding specific items) • Operating income of $178 million (compared to $211 million in 2016 (-16%))
• OIBD of $393 million (compared to $403 million in 2016 (-2%))
• Net earnings per common share of $0.72 (compared to net earnings of $1.21 in 2016)
• Net debt of $1,522 million as at December 31, 2017 (compared to $1,532 million as at December 31, 2016 ) and net debt to adjusted OIBD ratio 3 of 3.6x, down from 3.8x at year-end 2016.
Mr. Mario Plourde , President and Chief Executive Officer, commented: “Our fourth quarter results reflect year-over-year improvements in shipments, sales, and operating income on a consolidated basis. This was driven by solid performances from our containerboard division and European subsidiary Reno de Medici, where more favourable pricing and mix outweighed the impact of higher average raw material costs. In the case of containerboard, results also benefited from the consolidation of the Greenpac Mill results beginning in the second quarter of 2017. The specialty products segment delivered results that were below prior year levels due to a lower contribution from recovery and recycling activities. Our tissue division continued to face challenging market conditions in the fourth quarter, which resulted in production downtime to manage inventory. These factors, combined with a less favourable sales price and product mix, higher raw material prices and costs related to the ramp up of the new Oregon converting facility, impacted sales and profitability levels in this segment.
Sequentially, consolidated fourth quarter results reflected a less pronounced seasonal contraction than in prior years. This was primarily driven by results in our containerboard division, which generated increases in sales and operating income compared to the previous quarter, reflecting lower raw material prices and healthy demand. European boxboard operations also performed well, highlighting stronger business conditions, while results in our specialty products division remained relatively stable. Finally, our tissue segment performance was negatively impacted by lower volumes related to both seasonal demand variations and difficult market conditions, and a less favourable sales price and product mix.
We continued to make progress on strategic initiatives in 2017. At the corporate level, our internal business process transformation and ERP system initiatives progressed well, with implementations now largely completed. In the containerboard group, we finalized the sale of the Maspeth, NY , converting facility in January 2018 for US$72 million , increased our ownership position in the Greenpac Mill to 66.1%, began the construction of a new state-of-the-art containerboard converting facility in New Jersey , and strengthened our position in Canada with the acquisition of three converting plants and purchase of an interest in Tencorr Holdings Corporation. The European boxboard segment also acquired the Italian boxboard processing company Pac Service S.p.A, by purchasing the 66.67% of shares that it did not already own. Finally, we continued to deliver on our commitment to lower our debt. To this end, our leverage ratio 1 stood at 3.6x as of the end of 2017, down from 3.8x in 2016, and we successfully redeemed US$200 million of our US-denominated debt, which reduces our interest expense and exposure to currency fluctuations.”
more details at: https://www.cascades.com/en/media-centre/press-releases-and-news/press-release/2018/6060/cascades-announces-strong-annual-net-earnings-for-2017-and-releases-results-for-the-fourth-quarter-of-2017