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Dec 31, 2019
Mercer Q4 2019 Earnings Report
Mercer International Inc. reported a decrease in operating EBITDA and a net loss due to significant annual maintenance activities and weakness in the pulp markets.
Key Takeaways
Mercer International Inc. reported a decrease in operating EBITDA to negative $34.2 million, compared to $118.1 million in Q4 2018. The net loss for the quarter was $72.7 million, or $1.11 per share, compared to a net income of $45.0 million, or $0.69 per share, in the same quarter of the previous year. The results were impacted by significant annual maintenance activities in the pulp segment and weakness in the pulp markets.
Operating EBITDA decreased to negative $34.2 million from positive $118.1 million in Q4 2018.
Net loss was $72.7 million, or $1.11 per share, compared to net income of $45.0 million, or $0.69 per share in Q4 2018.
Pulp segment annual maintenance downtime of 54 days significantly contributed to negative Operating EBITDA of $34.2 million and a net loss of $72.7 million.
Wood segment benefitted from lower fiber costs which largely contributed to it achieving record quarterly operating income of $5.3 million.
Revenue by Segment
Forward Guidance
Going into 2020, the company expects continued steady demand to improve markets over the year. However, the current ongoing coronavirus outbreak could create inland logistics restrictions or other disruptions that may, over time, begin to slow down paper manufacturing in China and put pressure on pulp pricing and demand.
Positive Outlook
- Continued steady demand is expected to improve markets over the year.
- Stronger demand in the U.S. is expected to lead to modestly higher lumber prices in the near term.
Challenges Ahead
- The current ongoing coronavirus outbreak could create inland logistics restrictions or other disruptions.
- The coronavirus outbreak may slow down paper manufacturing in China.
- The coronavirus outbreak may put pressure on pulp pricing and demand.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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