Scotiabank has revised its price target for Cascades (CADNF, Financial), reducing it from C$11.50 to C$10. Despite this adjustment, the bank maintains an Outperform rating for the company’s shares. This update reflects Scotiabank's continued confidence in CADNF's potential, even as they reevaluate its market valuation.
CADNF Key Business Developments
Release Date: May 08, 2025
- Sales Levels: Decreased 5% from Q4; increased 4% year over year.
- Consolidated EBITDA: $125 million, decreased 14% from Q4; increased 21% year over year.
- Packaging Sales: Decreased 3% sequentially; increased 7% year over year.
- Packaging EBITDA: $109 million, decreased 17% from Q4; increased 45% year over year.
- Tissue Sales: Decreased 8% sequentially; decreased 1% year over year.
- Tissue EBITDA: $37 million, decreased 18% from Q4; decreased by $13 million year over year.
- Net Earnings Per Share: $0.07, compared to a net loss of $0.20 last year and $0.13 in Q4.
- Adjusted Net Earnings Per Share: $0.13, compared to zero last year and $0.25 in Q4.
- Adjusted Cash Flow from Operations: $62 million, up from $46 million year over year; decreased from $129 million in Q4.
- Capital Investments: $24 million in Q1; forecast of $175 million for 2025.
- Net Debt: Increased by $120 million in Q1; leverage maintained at 4.2 times.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Year-over-year consolidated EBITDA increased by 21%, driven by stronger pricing in packaging activities.
- Sales increased by 4% year over year, with selling prices and exchange rates offsetting negative volume impacts.
- Lower raw material costs benefited manufacturing results by $10 million.
- The company expects favorable OCC pricing in the coming months due to increased fiber availability.
- Cascades Inc (CADNF, Financial) has reinitiated near-term guidance, indicating confidence in navigating tariff discussions and macroeconomic uncertainties.
Negative Points
- Sales levels decreased by 5% from Q4 due to lower volumes, despite favorable exchange rates and average selling prices.
- Consolidated EBITDA decreased by 14% from Q4, impacted by lower volumes and higher operational costs.
- First-quarter sales in the tissue business decreased by 8% sequentially, driven by lower volumes.
- The Bear Island facility is behind its scheduled ramp-up objective, affecting production levels.
- Net debt increased by $120 million in the first quarter, primarily due to higher working capital requirements.
