Consolidated sales for the three-month period ended June 24, 2017, were $419 million, as compared to $376 million in the same quarter a year ago. The Company generated net earnings of $17 million or $0.17 per share in the June 2017 quarter compared to net earnings of $9 million or $0.09 per share in the June 2016 quarter. Operating earnings before depreciation, amortization and other items (adjusted EBITDA) was $59 million for the three-month period ended June 24, 2017, as compared to adjusted EBITDA of $26 million a year ago and adjusted EBITDA of $54 million in the prior quarter.
Business Segment Results
The Specialty Cellulose Pulp segment generated adjusted EBITDA of $22 million on sales of $124 million for the quarter ended June 24, 2017, compared to adjusted EBITDA of $28 million on sales of $120 million in the March 2017 quarter. Pulp sales were relatively unchanged with higher specialty pulp prices offset by lower shipments. Canadian dollar selling prices for specialty grades improved by $96 per tonne. While US dollar and euro prices for specialty pulps were relatively unchanged quarter-over-quarter, the increase was largely driven by a more favourable sales mix at the Temiscaming mill as well as a weaker Canadian dollar versus the US dollar. The higher specialty grade prices increased adjusted EBITDA by $4 million. The selling price of viscose and other grades was similar, as lower US dollar selling prices were offset by currency gains. Shipments were equal to 82% of capacity, compared to 86% in the March 2017 quarter. During the June 2017 quarter, the Temiscaming specialty cellulose pulp mill was idled for nine days due to its major maintenance outage. These occur at 12 month intervals. There were no major maintenance outages in the March 2017 quarter. As a result, the Temiscaming mill produced 7,000 less tonnes in the June 2017 quarter. Manufacturing costs increased by $7 million quarter-over-quarter, including $4 million for maintenance material and $3 million of fixed cost under-absorption associated with the aforementioned productivity decrease. Chemical business adjusted EBITDA increased by $2 million due to a combination of higher prices and lower costs.
The Forest Products segment generated adjusted EBITDA of $20 million on sales of $114 million for the quarter ended June 24, 2017, compared to adjusted EBITDA of $10 million on sales of $110 million in the prior quarter. SPF lumber sales increased by $11 million due primarily to higher prices. The June 2017 quarter also experienced the normal seasonal decline in log sales, which decreased by $9 million. During the June 2017 quarter, the random length lumber reference price increased by US $45 per mbf while the reference price for stud lumber increased by US $76 per mbf. Currency was also favourable as the Canadian dollar averaged US $0.742, a 1.7% decrease from US $0.755 in the prior quarter. The combined effect was that Canadian dollar selling prices increased by $60 per mbf, increasing adjusted EBITDA by $10 million. Lumber shipments were equal to 87% of capacity, unchanged from the prior quarter. Cost were similar quarter-over-quarter.
The Paper Pulp segment generated adjusted EBITDA of $15 million on sales of $99 million in the June 2017 quarter, compared to adjusted EBITDA of $9 million on sales of $85 million in the March 2017 quarter. The $14 million increase in sales was due to higher selling prices and shipments. The benchmark price (delivered China) for bleached eucalyptus kraft (BEK) increased by US $65 per tonne. US dollar prices for external high-yield pulp shipments followed a similar but less pronounced trend, increasing by US $40 per tonne quarter-over-quarter. Currency was also favourable as the Canadian dollar decreased versus the US dollar. Overall, average selling prices for external sales in Canadian dollars increased by $64 per tonne, increasing adjusted EBITDA by $8 million. Pulp shipments were equal to 102% of capacity in the June 2017 quarter as compared to 95% in the prior quarter. The June 2017 quarter saw increased major maintenance and the two pulp mills produced 3,400 fewer tonnes, with costs increasing by $2 million.
The Paper segment generated adjusted EBITDA of $18 million on sales of $102 million for the quarter ended June 24, 2017, compared to adjusted EBITDA of $16 million on sales of $96 million in the March 2017 quarter. The $6 million increase in sales was due to higher shipments of newsprint and higher prices for coated bleached board. The US dollar reference price for coated bleached board increased by US $20 per short ton quarter-over-quarter. Overall, average selling prices for coated bleached board were up $57 per tonne increasing adjusted EBITDA by $2 million. The coated bleached board shipment to capacity ratio was 103% compared to 106% in the prior quarter. Manufacturing costs increased by $2 million, primarily for purchased pulp. The US dollar benchmark price for newsprint was unchanged quarter-over-quarter. The newsprint mill experienced a less favourable sales mix and US dollar prices declined by US $5 per tonne. The previously noted decline in the value of the Canadian dollar offset the price decrease and average selling prices were relatively unchanged quarter-over-quarter. The newsprint shipment to capacity ratio was 92% compared to 79% in the prior quarter. Costs decreased by $1 million, primarily for electrical energy.
more detail at: http://tembec.com/sites/tembec.com/files/pdf/2017-07-26-e.pdf