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Dec 31, 2022
Mercer Q4 2022 Earnings Report
Mercer International Inc. reported a decrease in operating EBITDA and net income compared to the same quarter last year, influenced by lower sales prices, higher costs, and the German energy windfall tax, while pulp sales remained strong.
Key Takeaways
Mercer International Inc. reported fourth-quarter net income of $20.0 million and Operating EBITDA of $96.1 million. The results reflect strong pulp sales offset by lower sales prices, higher costs, and the impact of the German energy windfall tax.
Fourth quarter net income was $20.0 million.
Operating EBITDA was $96.1 million.
Pulp sales were strong, offsetting lower sales prices and higher costs.
The German energy windfall tax negatively affected results by approximately $49 million compared to the prior quarter.
Forward Guidance
Mercer anticipates modestly higher NBSK pulp prices in China due to reopening and seasonal demand, but expects declining prices in Europe and North America due to inflationary pressures. Lumber prices are expected to increase modestly due to curtailments and low inventory, offset by economic uncertainty.
Positive Outlook
- Expect modestly higher NBSK pulp prices in China due to China's reopening after lifting of COVID-19 restrictions and the seasonal demand increase after the lunar new year.
- Expect lumber prices to modestly increase in the first half of 2023 due to producer curtailments.
- Expect lumber prices to modestly increase in the first half of 2023 due to low customer inventory levels.
- Expect lumber prices to modestly increase in the first half of 2023 due to the start of the construction season.
- Mercer has strong operational foundation and the many options it gives us as we look to continue to grow and diversify our solid wood and bio-products revenues.
Challenges Ahead
- Expect modestly declining NBSK pulp prices in Europe and North America in the first half of 2023 as a result of lower demand due to inflationary pressures negatively impacting paper demand.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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