MERCER INTERNATIONAL INC
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
MERC$0.26+4.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0000950170-24-057125
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-094099
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 175 previous paragraphs and 229 current paragraphs.
107 unchanged; 51 reworded; 57 added; 16 removed; 1 previous and 14 current paragraphs rearranged.
Tables are not compared: 8 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (57)
Current report
In the second quarter of 2024, our pulp sales realizations continued to improve in all our key markets due to strengthening demand and supply-side disruptions. Our lumber sales realizations in the second quarter of 2024 were flat when compared to the first quarter of 2024 as a result of continued weakness in both the U.S. and Europe.
Current report
As we move into the third quarter of 2024, we currently expect the supply-side disruptions experienced in the second quarter to ease and traditionally lower seasonal demand to cause slight softening of pulp prices generally.
Current report
Costs and expenses in the second quarter of 2024 decreased by approximately 15% to $543.2 million from $638.7 million in the same quarter of 2023 driven by lower pulp and lumber sales volumes and lower per unit fiber, energy and chemical costs. In the second quarter of 2024, costs and expenses included a non-cash goodwill impairment of $34.3 million related to the Torgau facility, which was recognized as a result of ongoing weakness in lumber, pallet and biofuels markets in Europe stemming from high interest rates and other economic conditions. We continue to expect to realize the synergies from the Torgau acquisition as market and economic conditions improve. In the second quarter of 2023, we recorded a non-cash inventory impairment of $51.4 million, which was partially offset by $22.0 million of insurance proceeds received relating to the 2021 turbine downtime at our Rosenthal mill and the July 2022 fire at our Stendal mill.
Current report
In the second quarter of 2024, cost of sales depreciation and amortization was flat at $39.9 million compared to $40.1 million in the same quarter of 2023.
Current report
Selling, general and administrative expenses decreased by approximately 8% to $29.8 million in the second quarter of 2024 from $32.4 million in the same quarter of 2023 primarily due to lower employee compensation.
Current report
In the second quarter of 2024, our operating loss was $43.8 million compared to $108.8 million in the same quarter of 2023 primarily as a result of higher pulp sales realizations and lower per unit fiber, energy and chemical costs partially offset by the non-cash goodwill impairment recognized in the second quarter of 2024. In the second quarter of 2023, we recorded a non-cash inventory impairment which was partially offset by insurance proceeds received.
Current report
In the second quarter of 2024, our net loss was $67.6 million, or $1.01 per share, compared to $98.3 million, or $1.48 per share in the same quarter of 2023. The net loss in the second quarter of 2024 included the non-cash goodwill impairment of $34.3 million, or $0.51 per share.
Current report
In the second quarter of 2024, Operating EBITDA increased to $30.4 million from negative Operating EBITDA of $68.7 million in the same quarter of 2023 primarily due higher pulp sales realizations and lower per unit fiber, energy and chemical costs. In the second quarter of 2023, we recorded a non-cash inventory impairment which was partially offset by insurance proceeds received.
Current report
Pulp revenues in the second quarter of 2024 decreased by approximately 7% to $346.8 million from $374.2 million in the same quarter of 2023 as a result of lower sales volumes partially offset by higher sales realizations.
Current report
Energy and chemical revenues in the second quarter of 2024 decreased by approximately 28% to $20.6 million from $28.5 million in the same quarter of 2023 primarily due to lower sales realizations and energy sales volumes.
Current report
Total pulp production in the second quarter of 2024 decreased by approximately 11% to 421,692 ADMTs compared with 475,615 ADMTs in the same quarter of 2023 as a result of higher production lost for annual maintenance downtime and the disposal of the CPP joint venture investment in the first quarter of 2024, partially offset by the market curtailment at the Peace River and CPP mills in the second quarter of 2023. In the second quarter of 2024, our pulp mills had 44 days of downtime (approximately 77,600 ADMTs) which included 37 days of planned annual maintenance and seven additional days due to slower than expected start-up. In the second quarter of 2023, our pulp mills had 60 days of downtime (approximately 59,000 ADMTs) which included 25 days for annual maintenance and 35 days for market curtailment at the Peace River and CPP mills.
Current report
We estimate that annual maintenance downtime in the second quarter of 2024 adversely impacted our operating income by approximately $60.2 million, comprised of approximately $44.9 million in direct out-of-pocket expenses and the balance in reduced production.
Current report
Total pulp sales volumes in the second quarter of 2024 decreased by approximately 19% to 433,320 ADMTs from 536,878 ADMTs in the same quarter of 2023 primarily due to lower production and the timing of sales.
Current report
Costs and expenses in the second quarter of 2024 decreased by approximately 25% to $364.0 million from $486.3 million in the same quarter of 2023 primarily due to lower sales volumes and lower per unit fiber, energy and chemical costs. In the second quarter of 2023, we recorded a non-cash inventory impairment of $51.4 million which was partially offset by $22.0 million of insurance proceeds received relating to the 2021 turbine downtime at our Rosenthal mill and the July 2022 fire at our Stendal mill.
Current report
In the second quarter of 2024, transportation costs for our pulp segment decreased by approximately 30% to $33.7 million from $48.3 million in the same quarter of 2023 driven by lower pulp sales volumes and freight rates.
Current report
In the second quarter of 2024, depreciation and amortization was relatively flat at $27.2 million compared to $27.8 million in the same quarter of 2023.
Current report
Lumber revenues in the second quarter of 2024 decreased by approximately 9% to $53.9 million from $59.3 million in the same quarter of 2023 primarily as a result of lower sales volumes partially offset by a modestly higher sales realization.
Current report
Energy, biofuels and wood residuals revenues in the second quarter of 2024 decreased by approximately 22% to $14.2 million from $18.1 million in the same quarter of 2023 due to lower sales realizations and sales volumes.
Current report
Lumber production in the second quarter of 2024 decreased by approximately 9% to 111.4 MMfbm from 122.3 MMfbm in the same quarter of 2023 primarily due to planned maintenance downtime.
Current report
Lumber sales volumes in the second quarter of 2024 decreased by approximately 13% to 116.6 MMfbm from 133.9 MMfbm in the same quarter of 2023 as a result of lower production and the timing of sales.
Current report
In the second quarter of 2024, due to ongoing weakness in lumber, pallet and biofuels markets in Europe stemming from high interest rates and other economic conditions, we recognized a non-cash goodwill impairment of $34.3 million related to the Torgau facility.
Current report
In the second quarter of 2024, depreciation and amortization was relatively flat at $12.5 million compared to $12.1 million in the same quarter of 2023.
Current report
Transportation costs for our solid wood segment in the second quarter of 2024 decreased by approximately 12% to $14.5 million from $16.4 million in the same quarter of 2023 as a result of lower sales volumes.
Current report
Consolidated – Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Total revenues for the first half of 2024 were flat at $1,052.8 million compared to $1,052.5 million in the same period of 2023 as higher manufactured products sales revenues and pulp sales volumes were offset by lower lumber sales volumes and lower energy, pallet and pulp sales realizations.
Current report
Costs and expenses in the first half of 2024 decreased by approximately 7% to $1,097.0 million from $1,181.5 million in the same period of 2023 primarily as a result of lower per unit fiber, energy and chemical costs partially offset by the non-cash goodwill impairment of $34.3 million and the non-cash loss on disposal of the CPP joint venture investment of $23.6 million. In the first half of 2023, we recorded a non-cash inventory impairment of $66.6 million which was partially offset by $29.5 million of insurance proceeds received.
Current report
QUARTERLY REPORT - PAGE 30 fees.
Current report
In the first half of 2024, Operating EBITDA increased to $94.0 million from negative Operating EBITDA of $41.2 million in the same period of 2023 primarily as a result of lower per unit fiber, energy and chemical costs. In the first half of 2023, we recorded a non-cash inventory impairment which was partially offset by insurance proceeds received.
Current report
Operating Results by Business Segment
Current report
Pulp Segment– Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Pulp segment revenues, which includes pulp, energy and chemical revenues, were flat at $799.8 million compared to $803.1 million in the same period of 2023 as modestly higher pulp revenues were offset by lower energy and chemical revenues.
Current report
Energy and chemical revenues in the first half of 2024 decreased by approximately 25% to $44.7 million from $59.3 million in the same period of 2023 primarily due to lower sales realizations.
Current report
Total pulp production in the first half of 2024 modestly decreased to 960,599 ADMTs compared with 977,987 ADMTs in the same period of 2023 primarily as a result of higher production lost for annual maintenance downtime and the disposal of the CPP joint venture investment in the first quarter of 2024, partially offset by the market curtailment at the Peace River and CPP mills in the second quarter of 2023. In the first half of 2024, our pulp mills had 44 days of downtime (approximately 77,600 ADMTs) which included 37 days of planned annual maintenance and seven additional days due to slower than expected start-up. In the first half of 2023, our pulp mills had 70 days of downtime (approximately 72,500 ADMTs) which included 35 days of annual maintenance and 35 days for market curtailment at the Peace River and Cariboo mills.
Current report
We estimate that annual maintenance downtime in the first half of 2024 adversely impacted our operating income by approximately $60.2 million, comprised of approximately $44.9 million in direct out-of-pocket expenses and the balance in reduced production.
Current report
Our average NBSK pulp sales realizations in the first half of 2024 were flat at $766 per ADMT compared to $769 per ADMT in the same period of 2023. In the first half of 2024, average NBHK pulp sales realizations decreased by approximately 6% to $660 per ADMT from $700 per ADMT in the same period of 2023.
Current report
Costs and expenses in the first half of 2024 decreased by approximately 11% to $780.5 million from $874.3 million in the same period of 2023 primarily as a result of lower per unit fiber, chemical and energy costs partially offset by the non-cash loss on disposal of the CPP joint venture investment of $23.6 million. In the first half of 2023, we recorded a non-cash inventory impairment of $66.6 million which was partially offset by $29.5 million of insurance proceeds received.
Current report
In the first half of 2024, depreciation and amortization was flat at $54.6 million compared to $55.2 million in the same period of 2023.
Current report
Solid Wood Segment– Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Solid wood segment revenues in the first half of 2024 modestly increased to $249.3 million from $247.1 million in the same period of 2023 as a result of higher manufactured products and biofuels revenues partially offset by lower revenues from our other products.
Current report
Lumber revenues in the first half of 2024 decreased by approximately 8% to $109.8 million from $119.3 million in the same period of 2023 primarily due to lower sales volumes partially offset by modestly higher sales realization.
Showing the first 40 of 57 passages. Open the source sections for the rest.
Removed paragraphs (16)
Previous report
In the first quarter of 2024, our pulp sales realizations improved in all of our key markets relative to the fourth quarter of 2023, driven by stronger demand, low customer inventory levels and supply disruptions. Our lumber sales realizations increased in both the U.S. and European markets in the first quarter of 2024 relative to the fourth quarter of 2023 as a result of modestly higher demand.
Previous report
As we move into the second quarter of 2024, we currently expect higher pulp sales realizations from the U.S. and European markets due to increasing demand and the continued impact of global supply constraints. In China, we currently expect stable prices in the second quarter of 2024.
Previous report
QUARTERLY REPORT - PAGE 21 of 2024 due to steady demand for green alternative building products. Pallet prices are expected to remain generally stable in the second quarter of 2024.
Previous report
Per unit fiber costs for our solid wood segment increased in the first quarter of 2024 compared to the fourth quarter of 2023 as strong demand for sawlogs more than offset the availability of beetle damaged wood in Germany. For the second quarter of 2024, we currently expect modestly higher per unit fiber costs driven by continued strong demand.
Previous report
Costs and expenses in the first quarter of 2024 modestly increased to $553.9 million from $542.8 million in the same quarter of 2023 primarily as a result of higher pulp sales volumes and the non-cash loss on disposal of the CPP joint venture investment partially offset by lower per unit fiber, chemical, energy and freight costs.
Previous report
Selected Financial Information
Previous report
Energy and chemical revenues in the first quarter of 2024 decreased by approximately 21% to $24.1 million from $30.7 million in the same quarter of 2023 due to lower sales realizations partially offset by higher sales volumes.
Previous report
Total pulp production in the first quarter of 2024 increased by approximately 7% to 538,907 ADMTs compared with 502,372 ADMTs in the same quarter of 2023 driven by continued stable production and fewer days of annual maintenance downtime. In the first quarter of 2024, we had no annual maintenance downtime compared to ten days of annual maintenance downtime (approximately 13,500 ADMTs) in the first quarter of 2023.
Previous report
Costs and expenses in the first quarter of 2024 increased by approximately 7% to $416.5 million from $388.0 million in the first quarter of 2023 primarily due to higher pulp sales volumes and the non-cash loss on disposal of the CPP joint venture investment partially offset by lower per unit fiber, chemical, energy and freight costs.
Previous report
QUARTERLY REPORT - PAGE 25 per unit fiber costs to decrease in the second quarter of 2024 as a result of continued stable supply.
Previous report
In the first quarter of 2024, depreciation and amortization was flat compared to the same quarter of 2023.
Previous report
Selected Financial Information
Previous report
Lumber production in the first quarter of 2024 decreased by approximately 5% to 127.0 MMfbm from 134.0 MMfbm in the same quarter of 2023 due to weak demand.
Previous report
Average lumber sales realizations in the first quarter of 2024 increased by approximately 7% to $460 per Mfbm from $429 per Mfbm in the same quarter of 2023 driven by stronger demand in the U.S. market.
Previous report
Investing activities in the three months ended March 31, 2023 used cash of $32.6 million. In the three months ended March 31, 2023, we incurred capital expenditures of $33.4 million primarily related to upgrades to the wood rooms at
Previous report
As a result of improving market conditions for our products, we expect to proceed with certain high-return capital projects in 2024, primarily relating to our Torgau facility and Mercer Spokane facility, in addition to previously announced maintenance projects. Accordingly, we currently expect aggregate capital expenditure in 2024 to be between $95 million and $120 million.
Reworded paragraphs (51)
Previous wording
The following discussion and analysis of our results of operations and financial condition for the three months ended March 31, 2024 should be read in conjunction with our Interim Consolidated Financial Statements and related notes included in this quarterly report, as well as our most recent annual report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission, referred to as the “SEC”.
Current wording
The following discussion and analysis of our results of operations and financial condition for the three and six months ended June 30, 2024 should be read in conjunction with our Interim Consolidated Financial Statements and related notes included in this quarterly report, as well as our most recent annual report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission, referred to as the “SEC”.
Previous wording
As of March 31, 2024, third party industry quoted NBSK list prices in Europe and North America were approximately $1,460 per ADMT and $1,510 per ADMT, respectively and the third party industry quoted NBSK net price in China was approximately $780 per ADMT. Prices for China are net of discounts, allowances and rebates.
Current wording
As of June 30, 2024, the third party industry quoted NBSK list price in Europe was a record $1,635 per ADMT and in North America was approximately $1,790 per ADMT and the third party industry quoted NBSK net price in China was approximately $810 per ADMT. Prices for China are net of discounts, allowances and rebates.
Previous wording
In our solid wood segment, we currently expect lumber prices to remain generally flat in the U.S. and European markets in the second quarter of 2024. We currently expect mass timber prices to remain stable in the second quarter
Current wording
In our solid wood segment, we currently expect U.S. and European lumber prices and pallet prices to remain relatively steady in the third quarter of 2024 due to continued weak demand stemming from the high interest rate environment and economic uncertainty. We currently expect mass timber prices to remain relatively flat in the third quarter of 2024 as we complete previously secured orders for large scale projects.
Previous wording
Per unit fiber costs for the pulp segment modestly decreased in both Germany and Canada in the first quarter of 2024 compared to the fourth quarter of 2023 due to stable supply. For the second quarter of 2024, we currently expect a decrease in the per unit fiber costs for our pulp segment as a result of continued stable supply.
Current wording
Per unit fiber costs for the pulp and solid wood segments were flat in the second quarter of 2024 compared to the first quarter of 2024. For the third quarter of 2024, we currently expect stable per unit fiber costs.
Previous wording
Total revenues for the first quarter of 2024 increased by approximately 6% to $553.4 million from $522.7 million in the same quarter of 2023 primarily due to higher pulp sales volumes partially offset by lower pulp sales realizations.
Current wording
Total revenues for the second quarter of 2024 decreased by approximately 6% to $499.4 million from $529.9 million in the same quarter of 2023 primarily due to lower pulp and lumber sales volumes partially offset by higher pulp sales realizations and manufactured products revenues.
Previous wording
Interest expense in the first quarter of 2024 increased by approximately 45% to $27.6 million from $19.0 million in the same quarter of 2023 primarily due to the issuance of $200.0 million of 12.875% senior notes in September 2023 and higher borrowings and interest rates on our revolving credit facilities.
Current wording
Interest expense increased by approximately 33% to $26.8 million in the second quarter of 2024 from $20.1 million in the same quarter of 2023 primarily due to the issuance of $200.0 million of 12.875% senior notes in September 2023.
Previous wording
In the first quarter of 2024, other income increased to $4.9 million from $3.2 million in the same quarter of 2023. Other income in the first quarter of 2024 primarily consisted of interest earned on cash and foreign exchange gains on dollar denominated cash held at our operations as the dollar strengthened at the end of the first quarter of 2024. In the first quarter of 2023, other income primarily consisted of interest earned on cash.
Current wording
In the second quarter of 2024, other income increased to $4.3 million from $3.1 million in the same quarter of 2023. Other income in the second quarter of 2024 primarily consisted of interest earned on cash and foreign exchange gains on dollar denominated cash held at our operations as the dollar strengthened at the end of the second quarter of 2024. In the second quarter of 2023, other income primarily consisted of interest earned on cash.
Previous wording
Pulp segment revenues, which includes pulp, energy and chemical revenues, in the first quarter of 2024 increased by approximately 8% to $432.4 million from $400.4 million in the same quarter of 2023 due to higher sales volumes partially offset by lower sales realizations.
Current wording
Pulp segment revenues, which includes pulp, energy and chemical revenues, in the second quarter of 2024 decreased by approximately 9% to $367.4 million from $402.7 million in the same quarter of 2023 primarily due to lower sales volumes and lower energy and chemical sales realizations partially offset by higher pulp sales realizations.
Previous wording
In the second quarter of 2024, we currently expect a total of 35 days of annual maintenance downtime (approximately 60,800 ADMTs) at our pulp mills, comprised of 17 days (approximately 34,300 ADMTs) at our Stendal mill and 18 days (approximately 26,500 ADMTs) at our Peace River mill.
Current wording
In the third quarter of 2024, we currently expect a total of 18 days of annual maintenance downtime (approximately 19,700 ADMTs) at our pulp mills.
Previous wording
In the first quarter of 2024, third party industry quoted average list prices for NBSK pulp modestly increased in Europe and decreased in North America from the same quarter of 2023. Third party industry quoted average net prices for NBSK pulp in China decreased from the same quarter of 2023. Average list prices for NBSK pulp in Europe and North America were approximately $1,400 per ADMT and $1,440 per ADMT, respectively, in the first quarter of 2024 compared to approximately $1,377 per ADMT and $1,675 per ADMT, respectively, in the same quarter of 2023. Average NBSK net prices in China were approximately $745 per ADMT in the first quarter of 2024 compared to approximately $891 per ADMT in the same quarter of 2023. Prices quoted for China are net of discounts, allowances and rebates whereas quoted prices for Europe and North America are before applicable discounts, allowances and rebates.
Current wording
In the second quarter of 2024, third party industry quoted average list prices for NBSK pulp increased in both Europe and North America from the same quarter of 2023, including achieving a record list price of $1,635 per ADMT in Europe as of June 30, 2024. Third party industry quoted average net prices for NBSK pulp in China also increased from the same quarter of 2023. Average list prices for NBSK pulp in Europe and North America were approximately $1,602 per ADMT and $1,697 per ADMT, respectively, in the second quarter of 2024 compared to approximately $1,247 per ADMT and $1,510 per ADMT, respectively, in the same quarter of 2023. Average NBSK net prices in China were approximately $811 per ADMT in the second quarter of 2024 compared to approximately $668 per ADMT in the same quarter of 2023. Prices quoted for China are net of discounts, allowances and rebates whereas quoted prices for Europe and North America are before applicable discounts, allowances and rebates.
Previous wording
Our average NBSK pulp sales realizations in the first quarter of 2024 decreased by approximately 14% to $732 per ADMT from $849 per ADMT in the same quarter of 2023. In the first quarter of 2024, average NBHK pulp sales realizations decreased by approximately 22% to $631 per ADMT from $809 per ADMT in the same quarter of 2023.
Current wording
Our average NBSK pulp sales realizations in the second quarter of 2024 increased by approximately 15% to $811 per ADMT from $706 per ADMT in the same quarter of 2023. In the second quarter of 2024, average NBHK pulp sales realizations increased by approximately 16% to $701 per ADMT from $602 per ADMT in the same quarter of 2023.
Previous wording
On average, in the first quarter of 2024, overall per unit fiber costs decreased by approximately 16% from the same quarter of 2023 due to lower per unit fiber costs at all our pulp mills as a result of stable supply. We currently expect
Current wording
On average, in the second quarter of 2024, overall per unit fiber costs decreased by approximately 15% compared to the same quarter of 2023 due to stable supply. We currently expect stable per unit fiber costs in the third quarter of 2024.
Previous wording
In the first quarter of 2024, Operating EBITDA increased to $63.6 million from $27.5 million in the same quarter of 2023 primarily due to lower per unit fiber and other production costs, lower freight costs and higher pulp sales volumes partially offset by lower pulp sales realizations.
Current wording
Pulp segment operating income increased to $4.5 million in the second quarter of 2024 from an operating loss of $83.5 million in the same quarter of 2023 primarily due to higher pulp sales realizations and lower per unit fiber and other production costs. In the second quarter of 2023, we recorded a non-cash inventory impairment which was partially offset by insurance proceeds received.
Previous wording
Solid wood segment revenues in the first quarter of 2024 modestly decreased to $119.0 million from $121.0 million in the same quarter of 2023 as higher manufactured products and biofuel revenues were more than offset by lower revenues from other products.
Current wording
Solid wood segment revenues in the second quarter of 2024 modestly increased to $130.2 million from $126.1 million in the same quarter of 2023 due to higher manufactured products revenues partially offset by lower revenues from our other products.
Previous wording
In the first quarter of 2024, our mass timber business continued to ramp up operations and manufactured products revenues more than doubled to $16.7 million from $5.8 million in the same quarter of 2023.
Current wording
In the second quarter of 2024, as a result of the continued ramp-up of our mass timber business, manufactured products revenues more than doubled to $35.4 million from $16.0 million in the same quarter of 2023.
Previous wording
Lumber revenues in the first quarter of 2024 decreased by approximately 7% to $55.9 million from $60.0 million in the same quarter of 2023 primarily due to lower sales volumes partially offset by higher sales realizations. In the first quarter of 2024, realized lumber prices in the U.S. were higher compared to the same quarter of 2023 as a result of stronger demand. In Europe, realized lumber prices were relatively flat compared to the same quarter of 2023. The U.S. market accounted for approximately 53% of our lumber revenues and approximately 43% of our lumber sales volumes in the first quarter of 2024. The majority of the balance of our lumber sales were to Europe.
Current wording
Average lumber sales realizations in the second quarter of 2024 increased by approximately 5% to $463 per Mfbm from $443 per Mfbm in the same quarter of 2023 driven by a modest increase in demand in the U.S. market. In Europe, realized lumber prices were flat compared to the same quarter of 2023. The U.S. market accounted for approximately 45% of our lumber revenues and approximately 39% of our lumber sales volumes in the second quarter of 2024. The majority of the balance of our lumber sales were to Europe.
Previous wording
Fiber costs were approximately 75% of our lumber cash production costs in the first quarter of 2024. In the first quarter of 2024, per unit fiber costs for lumber production decreased by approximately 11% compared to the same quarter of 2023 because of continued stable supply. We currently expect modestly higher per unit fiber costs in the second quarter of 2024 driven by continued strong demand.
Current wording
Fiber costs were approximately 75% of our lumber cash production costs in the second quarter of 2024. In the second quarter of 2024, per unit fiber costs for lumber production decreased by approximately 12% compared to the same quarter of 2023 because of stable supply. We currently expect stable per unit fiber costs in the third quarter of 2024.
Previous wording
In the first quarter of 2024, our solid wood segment had an operating loss of $13.7 million compared to $27.1 million in the same quarter of 2023 primarily because of lower per unit energy, fiber and freight costs partially offset by lower pallet sales realizations.
Current wording
In the second quarter of 2024, our solid wood segment had an operating loss of $43.7 million compared to $22.5 million in the same quarter of 2023 primarily due to the non-cash goodwill impairment charge partially offset by higher mass timber sales volumes and lower per unit fiber costs.
Previous wording
In the first quarter of 2024, cost of sales depreciation and amortization decreased by approximately 15% to $40.4 million from $47.5 million in the same quarter of 2023 primarily due to the amortization in the first quarter of 2023 of an order backlog intangible asset acquired in the Torgau facility acquisition, which has been fully amortized.
Current wording
In the first half of 2024, cost of sales depreciation and amortization decreased by approximately 8% to $80.2 million from $87.6 million in the same period of 2023 primarily due to the amortization in the first quarter of 2023 of an order backlog intangible asset acquired in the Torgau facility acquisition, which has been fully amortized.
Previous wording
Selling, general and administrative expenses decreased by approximately 7% to $31.7 million in the first quarter of 2024 from $34.0 million in the first quarter of 2023 primarily as a result of cost management initiatives.
Current wording
Selling, general and administrative expenses decreased by approximately 7% to $61.5 million in the first half of 2024 from $66.3 million in the same period of 2023 primarily as a result of lower employee compensation and consulting
Previous wording
In the first quarter of 2024, our operating loss was $0.4 million compared to $20.1 million in the same quarter of 2023 primarily due to lower per unit fiber, chemical, energy and freight costs and higher pulp sales volumes partially offset by lower pulp sales realizations and the non-cash loss on disposal of the CPP joint venture investment.
Current wording
In the first half of 2024, our operating loss was $44.2 million compared to $129.0 million in the same period of 2023 primarily due to lower per unit fiber, energy and chemical costs partially offset by the non-cash goodwill impairment and the non-cash loss on disposal of the CPP joint venture investment. In the first half of 2023, we recorded a non-cash inventory impairment which was partially offset by insurance proceeds received.
Previous wording
During the first quarter of 2024, we had an income tax recovery of $6.4 million, or an effective tax rate of 28%. In the same quarter of 2023, we had an income tax recovery of $5.4 million, or an effective tax rate of 15% as we did not recognize a tax recovery for certain entities which we did not expect to realize a tax benefit.
Current wording
During the first half of 2024, we had an income tax recovery of $5.1 million, or an effective tax rate of 6% primarily due to the non-deductibility of the non-cash goodwill impairment and because we did not recognize a tax recovery for certain entities which we do not expect to realize a tax benefit. In the same period of 2023, we had an income tax recovery of $32.8 million, or an effective tax rate of 20%.
Previous wording
In the first quarter of 2024, our net loss was $16.7 million, or $0.25 per basic and diluted share, compared to $30.6 million, or $0.46 per basic and diluted share in the same quarter of 2023. The net loss in 2024 included the non-cash loss of $23.6 million, or $0.35 per basic and diluted share, relating to the disposal of the CPP joint venture investment.
Current wording
In the first half of 2024, our net loss was $84.3 million, or $1.26 per share, compared to $128.9 million, or $1.94 per share in the same period of 2023. The net loss in the first half of 2024 included the non-cash goodwill impairment of $34.3 million, or $0.51 per share, and the non-cash loss of $23.6 million, or $0.35 per share, relating to the disposal of the CPP joint venture investment.
Previous wording
Pulp revenues in the first quarter of 2024 increased by approximately 10% to $408.3 million from $369.7 million in the same quarter of 2023 as a result of higher sales volumes partially offset by lower sales realizations.
Current wording
Pulp revenues in the first half of 2024 modestly increased to $755.1 million from $743.8 million in the same period of 2023 as a result of higher sales volumes partially offset by lower sales realizations.
Previous wording
Total pulp sales volumes in the first quarter of 2024 increased by approximately 30% to 565,664 ADMTs from 435,973 ADMTs in the same quarter of 2023 primarily because of the sales timing and higher production.
Current wording
Total pulp sales volumes in the first half of 2024 modestly increased to 998,984 ADMTs from 972,851 ADMTs in the same period of 2023 primarily because of the timing of sales.
Previous wording
In the first quarter of 2024, we had a positive impact of approximately $2.6 million in operating income due to foreign exchange.
Current wording
In the first half of 2024, we had a positive impact of approximately $11.1 million in operating income due to foreign exchange.
Previous wording
Transportation costs for our pulp segment in the first quarter of 2024 increased by approximately 23% to $43.7 million from $35.4 million in the same quarter of 2023 driven by higher pulp sales volumes partially offset by lower rates.
Current wording
Transportation costs for our pulp segment in the first half of 2024 decreased by approximately 8% to $77.4 million from $83.7 million in the same period of 2023 driven by lower freight rates partially offset by higher pulp sales volumes.
Previous wording
In the first quarter of 2024, our pulp segment operating income increased by approximately 36% to $17.4 million from $12.8 million in the same quarter of 2023 primarily as a result of lower per unit fiber and other production costs, lower freight costs and higher sales volumes partially offset by lower sales realizations and the non-cash loss on disposal of the CPP joint venture investment.
Current wording
In the first half of 2024, our pulp segment operating income increased to $21.9 million from an operating loss of $70.7 million in the same period of 2023 primarily as a result of lower per unit fiber, chemical and energy costs partially offset by the non-cash loss on disposal of the CPP joint venture investment. In the first half of 2023, we recorded a non-cash inventory impairment which was partially offset by insurance proceeds received.
Previous wording
Energy, biofuels and wood residuals revenues in the first quarter of 2024 modestly decreased to $18.4 million from $19.0 million in the same quarter of 2023 as a result of lower sales realizations partially offset by higher biofuel sales volumes.
Current wording
Energy, biofuels and wood residuals revenues in the first half of 2024 decreased by approximately 12% to $32.6 million from $37.1 million in the same period of 2023 as a result of lower sales realizations partially offset by higher biofuels sales volumes.
Previous wording
Pallet revenues in the first quarter of 2024 decreased by approximately 23% to $28.0 million from $36.2 million in the same quarter of 2023 due to lower sales realizations and sales volumes as weak economic conditions in Europe negatively impacted demand.
Current wording
Pallet revenues in the first half of 2024 decreased by approximately 20% to $54.8 million from $68.9 million in the same period of 2023 due to lower sales realizations and sales volumes as weak economic conditions in Europe negatively impacted demand.
Previous wording
Lumber sales volumes in the first quarter of 2024 decreased by approximately 13% to 121.4 MMfbm from 139.9 MMfbm in the same quarter of 2023 primarily due to lower production and sales timing.
Current wording
Lumber sales volumes in the first half of 2024 decreased by approximately 13% to 238.0 MMfbm from 273.7 MMfbm in the same period of 2023 primarily due to lower production and timing of sales.
Previous wording
Manufactured products sales realizations increased to $3,644 per m 3 in the first quarter of 2024 from $666 per m 3 in the same quarter of 2023 as a result of higher CLT and glulam sales volumes, which generate higher sales realizations relative to other manufactured products.
Current wording
Manufactured products sales realizations increased to $3,128 per m 3 in the first half of 2024 from $1,587 per m 3 in the same period of 2023 as a result of higher CLT sales volumes, which generate higher sales realizations relative to other manufactured products.
Previous wording
In the first quarter of 2024, depreciation and amortization decreased by approximately 36% to $12.8 million from $19.9 million in the same quarter of 2023 primarily due to the amortization in the first quarter of 2023 of an order backlog intangible asset acquired in the Torgau facility acquisition, which has been fully amortized.
Current wording
In the first half of 2024, depreciation and amortization decreased by approximately 21% to $25.3 million from $32.0 million in the same period of 2023 primarily due to the amortization in the first quarter of 2023 of an order backlog intangible asset acquired in the Torgau facility acquisition, which has been fully amortized.
Previous wording
Transportation costs for our solid wood segment in the first quarter of 2024 decreased by approximately 24% to $13.4 million from $17.7 million in the same quarter of 2023 as a result of lower sales volumes and freight rates.
Current wording
Transportation costs for our solid wood segment in the first half of 2024 decreased by approximately 18% to $27.9 million from $34.0 million in the same period of 2023 as a result of lower sales volumes and freight rates.
Previous wording
Cash Flows from (used in) Operating Activities. Cash used in operating activities was $29.2 million in the three months ended March 31, 2024 compared to $49.7 million in the same period of 2023. An increase in accounts receivable used cash of $63.7 million in the three months ended March 31, 2024 and a decrease in accounts receivable provided cash of $11.3 million in the same period of 2023. A decrease in inventories provided cash of $0.1 million in the three months ended March 31, 2024 and adjusting for inventory impairments of $15.2 million, an increase in inventories used cash of $86.4 million in the same period of 2023. An increase in accounts payable and accrued expenses provided cash of $2.4 million in the three months ended March 31, 2024 and $0.3 million in the same period of 2023.
Current wording
Cash Flows from (used in) Operating Activities. Cash provided from operating activities was $33.0 million in the six months ended June 30, 2024 compared to cash used in operating activities of $35.0 million in the same period of 2023. An increase in accounts receivable used cash of $41.8 million in the six months ended June 30, 2024 and a decrease in accounts receivable provided cash of $23.5 million in the same period of 2023. A decrease in inventories provided cash of $4.6 million in the six months ended June 30, 2024 and adjusting for inventory impairments of $66.6 million, an increase in inventories used cash of $27.6 million in the same period of 2023. An increase in accounts payable and accrued expenses provided cash of $18.1 million in the six months ended June 30, 2024 and a decrease in accounts payable and accrued expenses used cash of $7.2 million in the same period of 2023.
Previous wording
Cash Flows from (used in) Investing Activities. Investing activities in the three months ended March 31, 2024 used cash of $17.5 million. In the three months ended March 31, 2024, we incurred $18.5 million of capital expenditures primarily related to optimization projects at our Mercer Spokane Mass Timber facility, referred to as Mercer Spokane facility, and maintenance projects across all our mills and facilities.
Current wording
Cash Flows from (used in) Investing Activities. Investing activities in the six months ended June 30, 2024 used cash of $37.6 million. In the six months ended June 30, 2024, we incurred $36.3 million of capital expenditures primarily related to log yard upgrades and other strategic projects at our Torgau facility, optimization projects at our Mercer Spokane facility, and maintenance projects across all our mills and facilities.
Previous wording
QUARTERLY REPORT - PAGE 27 our Canadian mills and maintenance and optimization projects at our German mills.
Current wording
Investing activities in the six months ended June 30, 2023 used cash of $150.4 million. In the six months ended June 30, 2023 we acquired the Structurlam Mass Timber Corporation and its subsidiaries for $82.1 million and incurred capital expenditures of $72.9 million primarily related to costs to complete the Rosenthal lignin plant, upgrades to the wood rooms at our Canadian mills and maintenance and optimization projects at our German mills. In the six months ended June 30, 2023, we received $2.7 million of insurance proceeds for our property damage claim related to a fire at our Stendal mill.
Previous wording
Cash Flows from (used in) Financing Activities. Financing activities in the three months ended March 31, 2024 provided cash of $6.8 million. In the three months ended March 31, 2024, we borrowed approximately $9.1 million under our revolving credit facilities.
Current wording
Cash Flows from (used in) Financing Activities. Financing activities in the six months ended June 30, 2024 used cash of $46.5 million. In the six months ended June 30, 2024, we repaid approximately $35.8 million under our revolving credit facilities and we paid dividends of $5.0 million.
Previous wording
Financing activities in the three months ended March 31, 2023 provided cash of $28.1 million. In the three months ended March 31, 2023, we borrowed approximately $30.1 million under our revolving credit facilities.
Current wording
Financing activities in the six months ended June 30, 2023 provided cash of $45.4 million. In the six months ended June 30, 2023, we borrowed approximately $54.4 million under our revolving credit facilities and paid dividends of $5.0 million.
Previous wording
As of March 31, 2024, we had cash and cash equivalents of $274.3 million, approximately $280.6 million available under our revolving credit facilities and aggregate liquidity of about $554.9 million.
Current wording
As of June 30, 2024, we had cash and cash equivalents of $263.2 million, approximately $317.4 million available under our revolving credit facilities and aggregate liquidity of about $580.6 million.
Showing the first 40 of 51 pairs. Open the source sections for the rest.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
During the second quarter of 2024, we had an income tax provision of $1.3 million primarily as a result of the non-deductibility of the non-cash goodwill impairment and because we did not recognize a tax recovery for certain entities which we do not expect to realize a tax benefit. In the same quarter of 2023, we had an income tax recovery of $27.5 million, or an effective tax rate of 22%.
Current report — wording carried from elsewhere
In the second quarter of 2024, we had a positive impact of approximately $8.3 million in operating income driven by foreign exchange compared to the same quarter of 2023.
Current report — wording carried from elsewhere
Pallet revenues in the second quarter of 2024 decreased by approximately 18% to $26.7 million from $32.7 million in the same quarter of 2023 as a result of lower sales volumes and sales realizations as weak economic conditions in Europe negatively impacted demand.
Current report — wording carried from elsewhere
Manufactured products sales realizations increased by approximately 31% to $2,942 per m 3 in the second quarter of 2024 from $2,243 per m 3 in the same quarter of 2023 as a result of higher CLT sales volumes, which generate higher sales realizations relative to other manufactured products.
Current report — wording carried from elsewhere
Interest expense in the first half of 2024 increased by approximately 39% to $54.4 million from $39.1 million in the same period of 2023 primarily as a result of the issuance of $200.0 million of 12.875% senior notes in September 2023.
Current report — wording carried from elsewhere
In the first half of 2024, other income increased by approximately 44% to $9.2 million from $6.4 million in the same period of 2023. Other income in the first half of 2024 primarily consisted of interest earned on cash and foreign exchange gains on dollar denominated cash held at our operations as the dollar strengthened at the end of the second quarter of 2024. In the first half of 2023, other income primarily consisted of interest earned on cash.
Current report — wording carried from elsewhere
None of the income or loss items following operating loss in our Interim Consolidated Statements of Operations are allocated to our segments, since those items are reviewed separately by management.
Current report — wording carried from elsewhere
In the first half of 2024, third party industry quoted average list prices for NBSK pulp increased in Europe and modestly decreased in North America from the same period of 2023. Third party industry quoted average net prices for NBSK pulp in China were flat in the first half of 2024 compared to the same period of 2023. Average list prices for NBSK pulp in Europe and North America were approximately $1,501 per ADMT and $1,568 per ADMT, respectively, in the first half of 2024 compared to approximately $1,312 per ADMT and $1,593 per ADMT, respectively, in the same period of 2023. Average NBSK net prices in China were approximately $778 per ADMT in the first half of 2024 compared to approximately $780 per ADMT in the same period of 2023. Prices quoted for China are net of discounts, allowances and rebates whereas quoted prices for Europe and North America are before applicable discounts, allowances and rebates.
Current report — wording carried from elsewhere
On average, in the first half of 2024, overall per unit fiber costs decreased by approximately 16% from the same period of 2023 due to stable supply.
Current report — wording carried from elsewhere
Manufactured products primarily includes CLT, glulam and finger joint lumber.
Current report — wording carried from elsewhere
Average lumber sales realizations in the first half of 2024 increased by approximately 6% to $461 per Mfbm from $436 per Mfbm in the same period of 2023 driven by a modest increase in demand in the U.S. market. In Europe, realized lumber prices were flat compared to the same period of 2023. The U.S. market accounted for approximately 49% of our lumber revenues and approximately 41% of our lumber sales volumes in the first half of 2024. The majority of the balance of our lumber sales were to Europe.
Current report — wording carried from elsewhere
Fiber costs were approximately 75% of our lumber cash production costs in the first half of 2024. In the first half of
Current report — wording carried from elsewhere
2024, per unit fiber costs for lumber production decreased by approximately 12% compared to the same period of 2023 because of stable supply.
Current report — wording carried from elsewhere
QUARTERLY REPORT - PAGE 40 are both highly cyclical. Higher fiber prices could affect producer profit margins if they are unable to pass along price increases to pulp and lumber customers or purchasers of surplus energy.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Based upon the current level of operations and our current expectations for future periods in light of the current economic environment, and in particular, current and expected pulp and lumber pricing and foreign exchange rates,