Cascades announced strong results for Q2 2018

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Cascades/Fordaq
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Cascades, a packaging and tissue products manufacturer, reported its unaudited financial results for the three-month period ended June 30, 2018.

In Q2 2018, the company reached the record sales level of $1,179 million (compared to $1,098 million in Q1 2018 (+7%) and $1,130 million in Q2 2017 (+4%)).

Cascades' figures including specific item were the following: operating income came up to $73 million (compared to $112 million in Q1 2018 (-35%) and $48 million in Q2 2017 (+52%)), while its operating income before depreciation and amortization (OIBD)1 reached $131 million (compared to $167 million in Q1 2018 (-22%) and $104 million in Q2 2017 (+26%)).

The company's net earnings per common share for the period equalled $0.28 (compared to net earnings of $0.65 in Q1 2018 and net earnings of $2.70 in Q2 2017)

In Q2 2018, Cascades' adjusted (excluding specific items) figures were the following: operating income increased to $76 million (compared to $50 million in Q1 2018 (+52%) and $51 million in Q2 2017 (+49%)), its OIBD came up to $134 million (compared to $105 million in Q1 2018 (+28%) and $107 million in Q2 2017 (+25%)), and net earnings per common share equalled $0.30 (compared to net earnings of $0.13 in Q1 2018 and net earnings of $0.25 in Q2 2017)

During the same period the company's net debt came up to $1,586 million as at June 30, 2018 (compared to $1,534 million as at March 31, 2018).

Mr. Mario Plourde, President and Chief Executive Officer, commented: "We are pleased with our consolidated second quarter financial and operating performance. The Containerboard Packaging and European Boxboard divisions benefited from solid market and pricing conditions and delivered strong results that were in line with expectations. The Specialty Products division also met expectations in spite of the continued pressure on results from the recovery operations due to lower raw material prices. Results from our Tissue segment were down, reflecting the competitive marketplace and higher virgin pulp and white recycled fibre costs. This was in line with our updated outlook of stronger sales and shipment levels during the period. Transportation costs and availability also presented challenges for our North American operations.

On the strategic front, production began ramping up in May at the new containerboard converting facility in NJ, on schedule. Existing volumes will continue to be transferred to the site from other facilities, most notably the NY converting asset that will cease production by year-end. In late July, we announced the acquisition of the Bear Islandfacility in Virginia, and our intention to convert the asset into a state-of-the-art containerboard machine capable of producing lightweight recycled liner and medium. The scope and project plans are expected to be finalized in 2019, subject to Board approval, with a targeted production start up in 2021. While the project will involve important capital expenditures, it is directly in line with our strategy to modernize our platforms and optimize and grow our geographic footprint. The European Boxboard division, via our 57.8% equity position in Reno de Medici S.p.A., announced the acquisition of Barcelona Cartonboard SAU, an important European producer of coated cartonboard based in Spain, that is expected to close by the end of 2018. Finally, our leverage ratio stood at 3.5x1 at the end of the second quarter, a slight improvement from the end of 2017."

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