Cascades Inc. Releases Mixed Financial Results for Q4 2024 and Annual Review

Cascades Inc. Reports Financial Outcomes for Fourth Quarter and Year-End 2024

Cascades Inc. (TSX: CAS) has announced its financial results for the fourth quarter and the entirety of 2024, presenting a mixed picture characterized by sales increases alongside ongoing net losses. The report was released on February 20, 2025, outlining key financial metrics from October to December and throughout the fiscal year.

Q4 2024 Performance Highlights

During Q4 2024, Cascades achieved total sales amounting to CAD 1,211 million, slightly up from CAD 1,201 million in the previous quarter and a notable increase from CAD 1,138 million in Q4 2023. Operating income for this quarter was reported at CAD 16 million, a decline from CAD 36 million in Q3 2024 but a recovery from a loss of CAD 24 million a year prior. However, the company faced a net loss per share of CAD (0.13), contrasting with earnings of CAD 0.01 per share in Q3 2024 and a more substantial loss of CAD (0.57) in the same quarter last year.

In terms of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), Cascades reported CAD 146 million, up from CAD 140 million in the third quarter and CAD 122 million a year ago. The adjusted net earnings per common share were recorded at CAD 0.25, a slight drop from CAD 0.27 in Q3 2024, yet a significant improvement over CAD 0.05 earned in Q4 2023.

Full Year 2024 Performance Review

For the entire year, Cascades reported total sales of CAD 4,701 million, a marginal increase from CAD 4,638 million in 2023. However, the operating income shot up significantly to CAD 95 million, more than double from CAD 40 million reported in the previous year. Despite these advancements, the company still revealed a net loss per share of CAD (0.31), a reduced loss from CAD (0.76) recorded last year.

Adjusted EBITDA for 2024 came in at CAD 501 million, contrasting with CAD 558 million in 2023, reflecting a positive but decreasing cash flow trend. Adjusted net earnings per share also fell to CAD 0.60 from CAD 1.08 in 2023, mirroring the adjustments in compensation to changing market conditions.

In a strategic move, the company carried a net debt totaling CAD 2,096 million as of December 31, 2024, compared to CAD 1,882 million a year earlier, translating to a net debt to EBITDA ratio of 4.2x, an increase from 3.4x.

Management Commentary

Hugues Simon, the President and CEO of Cascades, expressed satisfaction with the Q4 results, citing favorable selling prices and raw material costs that aided performance, despite seasonal volume declines that typically affect this period. Specific segments like Containerboard and Specialty Products continued to yield strong performance, counterbalancing challenges in Tissue.

Simon emphasized the uncertainties posed by potential bilateral tariffs between Canada and the U.S. on the company's near-term financial outlook. Acknowledging that around 11% of their sales are from products manufactured in Canada and sold to U.S. customers, Cascades has initiated proactive measures to mitigate these effects, including sourcing changes and production reallocations.

Simon outlined that the strategic focus for the next 24 months will be on efficient practices targeting improvements in productivity while ensuring superior health and safety standards. The goal is to establish Cascades as the preferred supplier in its industry and to strengthen profitability, cash flow, and capital deployment while reducing debt levels.

Looking Ahead

Cascades Inc. will host a conference call to delve deeper into these financial results and future strategies, offering investors and analysts detailed insights into the company’s direction amidst a fluctuating economic landscape. While challenges remain, the company is poised to leverage its operational capabilities and focus areas to navigate through these turbulent times effectively.

In conclusion, while Cascades experienced commendable sales growth and operational improvements in 2024, it must continue navigating a path marked by net losses and external economic pressures to enhance shareholder value in the future.