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Mar 31, 2023
Mercer Q1 2023 Earnings Report
Mercer International Inc. reported first quarter results with a net loss of $30.6 million and Operating EBITDA of $27.5 million.
Key Takeaways
Mercer International Inc. reported a decrease in revenue and a net loss for Q1 2023, impacted by lower pulp sales volumes, lower lumber and energy sales realizations, and higher fiber and chemical costs. The company's Operating EBITDA decreased significantly compared to the same quarter in the previous year, while the Mass Timber business continued to grow its cross-laminated timber order book.
First quarter Operating EBITDA was $27.5 million, which includes a $15.2 million non-cash inventory impairment charge.
Net loss for the first quarter was $30.6 million (or $0.46 per share).
Pulp segment had strong production with an increase of approximately 7% compared to the fourth quarter of 2022.
Lumber production increased approximately 14% compared to the fourth quarter of 2022, with sales volumes increasing approximately 41%.
Revenue by Segment
Forward Guidance
Looking forward to the second quarter of 2023, Mercer currently believes pulp prices will decline, with additional downward pricing pressure on hardwood pulp. Lumber demand is expected to see a modest increase as we move into the residential construction season, which we believe will also create some upward pricing pressure. Our Mass Timber business continues to grow its order book.
Positive Outlook
- Lumber demand is expected to see a modest increase as we move into the residential construction season, which we believe will also create some upward pricing pressure.
- Our Mass Timber business continues to grow its order book.
- Experiencing reductions in input costs such as fiber and chemicals.
- Company has strong liquidity and a strong operational foundation.
- Company will continue to manage our liquidity and working capital prudently and run the Company based on continuous improvement to enhance efficiency and lower costs.
Challenges Ahead
- Pulp prices will decline, with additional downward pricing pressure on hardwood pulp
- Market adjusts to new South American supply
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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