MERCER INTERNATIONAL INC
For the period ended Mar 31, 2025. Filed May 1, 2025.
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.
Mar 31, 2025 · Filed May 1, 2025
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 2024-09-30; filed 2024-10-31.
0000950170-24-119586
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000950170-25-061956
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 234 previous paragraphs and 179 current paragraphs.
101 unchanged; 45 reworded; 32 added; 85 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 8 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 (32)
Current report
In the first quarter of 2025, our NBSK pulp sales realizations remained strong in all of our key markets, driven by continued stable demand and ongoing supply constraints, compared to the fourth quarter of 2024. In the first quarter of 2025, our lumber sales realizations increased in both the U.S. and European markets compared to the fourth quarter of 2024 as a result of reduced supply and steady demand.
Current report
We currently expect pulp prices in Europe and North America to modestly increase in the second quarter of 2025 due to continued stable demand and ongoing supply constraints. In China, we currently expect lower pulp prices, particularly for NBHK pulp, in the second quarter of 2025 as a result of the weakened economic environment.
Current report
In the second quarter of 2025, we currently expect lumber prices to modestly decrease in the U.S. as a result of the impact of the current economic environment on customer demand. In Europe, we currently expect lumber prices to
Current report
Per unit fiber costs for the pulp segment were relatively steady in the first quarter of 2025 compared to the fourth quarter of 2024. For the second quarter of 2025, we currently expect per unit fiber costs for our German pulp mills to be higher due to strong demand and reduced supply and for our Canadian pulp mills to be relatively stable.
Current report
Per unit fiber costs for the solid wood segment increased in the first quarter of 2025 compared to the fourth quarter of 2024 due to strong demand in Germany. For the second quarter of 2025, we currently expect higher per unit fiber costs for our solid wood segment due to continued strong demand.
Current report
Demand and pricing for our products may be further impacted by ongoing developments in international trade policies, including tariffs proposed or imposed by the United States on goods originating from Canada, the European Union and other countries, and related countermeasures. During the first quarter of 2025, there was no material impact from tariffs on our costs and revenues. See Item 1A. Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2024 for further information.
Current report
Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
Current report
Manufactured products primarily includes CLT and glulam.
Current report
Total revenues for the first quarter of 2025 decreased by approximately 8% to $507.0 million from $553.4 million in the same quarter of 2024 primarily due to lower pulp sales volumes partially offset by higher pulp and lumber sales realizations.
Current report
Costs and expenses in the first quarter of 2025 decreased by approximately 10% to $500.2 million from $553.9 million in the same quarter of 2024 primarily as a result of lower pulp sales volumes and the positive impact of a stronger dollar on our Canadian dollar and euro denominated costs and expenses partially offset by higher planned maintenance downtime at our Celgar mill and higher per unit fiber costs. In the first quarter of 2024, costs and expenses included a non-cash loss of $23.6 million recognized in connection with the dissolution of the CPP joint venture.
Current report
In the first quarter of 2025, our operating income was $6.7 million compared to an operating loss of $0.4 million in the same quarter of 2024. The increase was primarily due to higher pulp and lumber sales realizations and the positive impact of a stronger dollar on our Canadian dollar and euro denominated costs and expenses partially offset by higher planned maintenance downtime and higher per unit fiber costs. In the first quarter of 2024, costs and expenses included a non-cash loss of $23.6 million recognized in connection with the dissolution of the CPP joint venture.
Current report
Interest expense in the first quarter of 2025 was relatively flat at $28.2 million compared to $27.6 million in the same quarter of 2024.
Current report
Selected Financial Information
Current report
Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
Current report
Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the first quarter of 2025 decreased by approximately 12% to $381.1 million from $432.4 million in the same quarter of 2024 primarily due to lower pulp revenues.
Current report
Pulp revenues in the first quarter of 2025 decreased by approximately 13% to $357.0 million from $408.3 million in the same quarter of 2024 as a result of lower sales volumes partially offset by higher sales realizations.
Current report
Energy and chemical revenues in the first quarter of 2025 and 2024 were flat at $24.1 million.
Current report
Total pulp production in the first quarter of 2025 decreased by approximately 15% to 458,909 ADMTs from 538,907 ADMTs in the same quarter of 2024 primarily as a result of the dissolution of the CPP joint venture in the first quarter of 2024 and the 22 days of planned annual maintenance downtime (approximately 29,700 ADMTs) at our Celgar mill in the first quarter of 2025. In the first quarter of 2024, we had no planned annual maintenance downtime.
Current report
In the second quarter of 2025, we currently expect a total of 21 days of annual maintenance downtime (approximately 30,100 ADMTs) at our pulp mills.
Current report
Costs and expenses in the first quarter of 2025 decreased by approximately 13% to $360.9 million from $416.5 million in the same quarter of 2024 primarily as a result of lower pulp sales volumes and the positive impact of a stronger dollar on our Canadian dollar and euro denominated costs and expenses partially offset by higher planned maintenance downtime. In the first quarter of 2024, costs and expenses included a non-cash loss of $23.6 million recognized in connection with the dissolution of the CPP joint venture.
Current report
Overall average per unit fiber costs in the first quarter of 2025 were relatively steady compared to the same quarter of 2024. We completed a wood room upgrade at our Celgar mill during the first quarter of 2025. The project was designed to reduce our dependence on sawmill residuals and lower our per unit fiber costs. For the second quarter of 2025, we currently expect per unit fiber costs for our German pulp mills to be higher due to strong demand and reduced supply and for our Canadian pulp mills to be relatively stable.
Current report
In the first quarter of 2025, Segment Operating EBITDA for the pulp segment decreased by approximately 27% to $49.9 million from $68.5 million in the same quarter of 2024 primarily as a result of higher planned maintenance downtime partially offset by higher pulp sales realizations and the positive impact of a stronger dollar on our Canadian dollar and euro denominated costs and expenses.
Current report
Selected Financial Information
Current report
Manufactured products primarily includes CLT and glulam.
Current report
Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
Current report
In the first quarter of 2025, manufactured products revenues increased by approximately 13% to $18.8 million from $16.7 million in the same quarter of 2024 primarily due to timing of mass timber projects in progress.
Current report
Lumber production in the first quarter of 2025 was relatively flat at 128.0 MMfbm compared to 127.0 MMfbm in the same quarter of 2024.
Current report
In the first quarter of 2025, Segment Operating EBITDA for the solid wood segment was negative $0.3 million compared to negative $0.9 million in the same quarter of 2024 primarily due to higher lumber sales realizations partially offset by higher per unit fiber costs.
Current report
In the three months ended March 31, 2024, investing activities 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 facility and maintenance projects across all mills and facilities.
Current report
In the three months ended March 31, 2024, financing activities provided cash of $6.8 million. In the three months ended March 31, 2025 we borrowed approximately $9.1 million under our revolving credit facilities.
Current report
We have reduced our planned capital expenditures for fiscal 2025 and currently expect them to be between $90.0 million to $100.0 million.
Current report
the impacts of changes in international trade policies, including tariffs or other trade barriers by the United States, or other nations, may adversely impact our business, financial condition and results of operations;
Removed paragraphs (85)
Previous report
In the third quarter of 2024, we continued to benefit from strong softwood pulp markets as prices remained mostly stable during a period of traditionally weaker seasonal demand. In the third quarter of 2024, hardwood prices decreased in China when compared to the second quarter of 2024 as the market absorbed increased hardwood capacity. In the third quarter of 2024, our lumber sales realizations were slightly down compared to the second quarter of 2024 as a result of continued weakness in both the U.S. and Europe.
Previous report
As we move into the fourth quarter of 2024, we currently expect relatively stable pulp sales realizations as somewhat weaker demand is offset by continued supply constraints.
Previous report
Per unit fiber costs for the pulp and solid wood segments were flat in the third quarter of 2024 compared to the second quarter of 2024. For the fourth quarter of 2024, we currently expect relatively stable per unit fiber costs in our pulp segment and modestly higher per unit fiber costs in our solid wood segment due to strong demand.
Previous report
Manufactured products primarily includes CLT, glulam, and finger joint lumber.
Previous report
Total revenues for the third quarter of 2024 increased by approximately 7% to $502.1 million from $470.8 million in the same quarter of 2023 primarily due to higher pulp and manufactured products sales realizations partially offset by lower overall sales volumes. Particularly, in the third quarter of 2024, pulp sales volumes were impacted by several unrelated events, including unscheduled downtime at our Peace River mill, a slower than normal maintenance start-up at our Stendal mill and isolated mechanical incidents at our Celgar mill.
Previous report
Costs and expenses in the third quarter of 2024 increased by approximately 4% to $493.3 million from $474.2 million in the same quarter of 2023 driven by higher per unit fiber costs partially offset by lower pulp sales volumes. In the third quarter of 2024, we recorded a $4.0 million non-cash inventory impairment at our Peace River mill as a result of lower NBHK pulp prices. Per unit fiber costs increased relative to the third quarter of 2023 because the comparative period included the sale and revaluation of previously impaired inventory. After giving effect to such impairments, overall per unit fiber costs in the third quarter of 2024 decreased slightly compared to the same period of 2023.
Previous report
In the third quarter of 2024, our operating income was $8.8 million compared to an operating loss of $3.4 million in the same quarter of 2023 primarily as a result of higher pulp and manufactured products sales realizations partially offset by higher costs and expenses and lower pulp sales volumes as a result of unplanned downtime.
Previous report
Interest expense increased by approximately 21% to $26.4 million in the third quarter of 2024 from $21.9 million in the same quarter of 2023 primarily due to the issuance in September 2023 of $200.0 million of 12.875% senior notes which mature on October 1, 2028 (the “2028 Senior Notes”).
Previous report
In the third quarter of 2024, our net loss was $17.6 million, or $0.26 per share, compared to $26.0 million, or $0.39 per share in the same quarter of 2023.
Previous report
Operating Results by Business Segment
Previous report
None of the income or loss items following operating income (loss) in our Interim Consolidated Statements of Operations are allocated to our segments, since those items are reviewed separately by management.
Previous report
Pulp segment revenues, which includes pulp, energy and chemical revenues, in the third quarter of 2024 increased by approximately 7% to $373.3 million from $348.9 million in the same quarter of 2023 as higher pulp revenues were partially offset by lower energy and chemical revenues.
Previous report
Pulp revenues in the third quarter of 2024 increased by approximately 11% to $354.2 million from $318.1 million in the same quarter of 2023 as a result of higher sales realizations partially offset by lower sales volumes.
Previous report
Total pulp production in the third quarter of 2024 decreased by approximately 13% to 415,837 ADMTs compared with 479,924 ADMTs in the same quarter of 2023 as a result of the disposal of the CPP joint venture investment in the first quarter of 2024, unplanned downtime at the Peace River mill to complete necessary repairs to the mill’s digester after experiencing a mechanical failure, the impacts of a slower than normal maintenance start-up at our Stendal mill and isolated mechanical incidents at our Celgar mill, partially offset by the port strike related curtailment at the Celgar mill in the third quarter of 2023. In the third quarter of 2024, our pulp mills had 43 days of downtime (approximately 57,600 ADMTs) which included 20 days of planned annual maintenance and 23 days of unplanned downtime at the Peace River mill. In the third quarter of 2023, our pulp mills had 39 days of downtime (approximately 48,400 ADMTs) which included 13 days for planned annual maintenance downtime and 26 days for the curtailment at the Celgar mill.
Previous report
The Peace River mill had an additional 12 days of unplanned downtime in the fourth quarter of 2024 in connection with the completion of repairs to the mill’s digester. We currently do not have any remaining planned annual maintenance downtime in the fourth quarter of 2024.
Previous report
Costs and expenses in the third quarter of 2024 increased by approximately 6% to $348.6 million from $327.9 million in the same quarter of 2023 primarily due to higher per unit fiber, maintenance and freight costs and the negative impact of a weaker dollar, partially offset by lower pulp sales volumes and lower per unit energy and chemical costs.
Previous report
On average, in the third quarter of 2024, overall per unit fiber costs increased by approximately 25% compared to the same quarter of 2023. In the third quarter of 2024 we recorded a $4.0 million non-cash inventory impairment at our Peace River mill caused by low NBHK pulp prices. Per unit fiber costs increased relative to the third quarter of 2023 because the comparative period included the sale and revaluation of previously impaired inventory. After giving effect to such impairments, per unit fiber costs in the third quarter of 2024 decreased slightly compared to the same period of 2023. We currently expect relatively flat per unit fiber costs in the fourth quarter of 2024.
Previous report
In the third quarter of 2024, depreciation and amortization was relatively flat at $28.7 million compared to $28.2 million in the same quarter of 2023.
Previous report
Pulp segment operating income increased by approximately 23% to $26.0 million in the third quarter of 2024 from $21.2 million in the same quarter of 2023 primarily due to higher pulp sales realizations partially offset by higher costs and expenses and lower sales volumes caused by unplanned downtime.
Previous report
Manufactured products primarily includes CLT, glulam and finger joint lumber.
Previous report
Solid wood segment revenues in the third quarter of 2024 increased by approximately 5% to $125.1 million from $119.5 million in the same quarter of 2023 due to higher manufactured products revenues partially offset by lower revenues from our other products.
Previous report
Lumber revenues in the third quarter of 2024 modestly decreased to $49.1 million from $50.8 million in the same quarter of 2023 primarily as a result of lower sales volumes.
Previous report
Energy, biofuels and wood residuals revenues in the third quarter of 2024 decreased by approximately 28% to $13.7 million from $19.1 million in the same quarter of 2023 primarily due to lower biofuels and wood residuals sales realizations and lower energy sales volumes.
Previous report
In the third quarter of 2024, as a result of the continued ramp-up of our mass timber business, manufactured products revenues increased by approximately 71% to $35.8 million from $20.9 million in the same quarter of 2023.
Previous report
Lumber production in the third quarter of 2024 increased by approximately 30% to 122.5 MMfbm from 94.4 MMfbm in the same quarter of 2023 primarily due to lower planned maintenance downtime and higher production at our Torgau facility.
Previous report
Lumber sales volumes in the third quarter of 2024 decreased by approximately 5% to 108.8 MMfbm from 114.7 MMfbm in the same quarter of 2023 as a result of the timing of sales.
Previous report
Average lumber sales realizations in the third quarter of 2024 increased to $451 per Mfbm from $443 per Mfbm in the same quarter of 2023 driven by a modest increase in demand in Europe. In the U.S. market, realized lumber prices decreased compared to the same quarter of 2023 due to weak demand. The U.S. market accounted for approximately 46% of our lumber revenues and approximately 43% of our lumber sales volumes in the third quarter of 2024. The majority of the balance of our lumber sales were to Europe.
Previous report
In the third quarter of 2024, depreciation and amortization was relatively flat at $12.7 million compared to $12.5 million in the same quarter of 2023.
Previous report
In the third quarter of 2024, our solid wood segment had an operating loss of $14.7 million compared to $19.7 million in the same quarter of 2023 primarily due to the higher mass timber sales realizations partially offset by lower biofuels and wood residuals sales realizations.
Previous report
Consolidated – Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Total revenues for the nine months ended September 30, 2024 modestly increased to $1,555.0 million from $1,523.4 million in the same period of 2023 as higher pulp, manufactured products and lumber sales realizations were mostly offset by lower sales realizations from our other products and lower lumber sales volumes.
Previous report
In the nine months ended September 30, 2024, costs and expenses included a non-cash loss of $23.6 million in connection with the dissolution of the CPP joint venture and 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 have achieved some of the planned synergies from the Torgau acquisition and expect to realize further synergies as market and economic conditions improve.
Previous report
Costs and expenses in the nine months ended September 30, 2024 decreased by approximately 4% to $1,590.3 million from $1,655.7 million in the same period of 2023 primarily as a result of lower per unit fiber, energy and chemical costs and lower lumber and pulp sales volumes partially offset by higher planned maintenance downtime at our pulp mills, the non-cash goodwill impairment and the non-cash loss on disposal of the CPP joint venture investment.
Previous report
In the nine months ended September 30, 2024, cost of sales depreciation and amortization decreased by approximately 5% to $121.8 million from $128.5 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 report
Selling, general and administrative expenses decreased by approximately 6% to $90.6 million in the nine months ended September 30, 2024 from $96.4 million in the same period of 2023 primarily as a result of lower employee compensation and consulting fees.
Previous report
In the nine months ended September 30, 2024, our operating loss was $35.4 million compared to $132.4 million in the same period of 2023 primarily due to lower per unit fiber and other production costs and higher pulp, manufactured products and lumber sales realizations partially offset by lower sales realizations from our other products, higher planned maintenance downtime, the non-cash goodwill impairment and the non-cash loss on disposal of the CPP joint venture investment.
Previous report
Interest expense in the nine months ended September 30, 2024 increased by approximately 32% to $80.8 million from $61.0 million in the same period of 2023 primarily as a result of the issuance of $200.0 million of 2028 Senior Notes in September 2023.
Previous report
In the nine months ended September 30, 2024, other income decreased by approximately 6% to $9.1 million from $9.7 million in the same period of 2023. Other income in the nine months ended September 30, 2024 and 2023 primarily consisted of interest earned on cash.
Previous report
In the nine months ended September 30, 2024, Operating EBITDA increased to $144.5 million from negative Operating EBITDA of $3.7 million in the same period of 2023 primarily as a result of lower per unit fiber and other production costs and higher pulp, manufactured products and lumber sales realizations partially offset by lower sales realizations from our other products and higher planned maintenance downtime at our pulp mills.
Previous report
Operating Results by Business Segment
Showing the first 40 of 85 passages. Open the source sections for the rest.
Reworded paragraphs (45)
Previous wording
The following discussion and analysis of our results of operations and financial condition for the three and nine months ended September 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”.
Current wording
The following discussion and analysis of our results of operations and financial condition for the three months ended March 31, 2025 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, 2024 filed with the Securities and Exchange Commission, referred to as the “SEC”.
Previous wording
As of September 30, 2024, the third party industry quoted NBSK pulp list price in Europe and North America were approximately $1,535 per ADMT and $1,735 per ADMT, respectively, and the third party industry quoted NBSK pulp net price in China was approximately $754 per ADMT. Prices for China are net of discounts, allowances and rebates.
Current wording
As of March 31, 2025, the third-party industry quoted NBSK pulp list price in Europe and North America were approximately $1,595 per ADMT and $1,805 per ADMT, respectively, and the third-party industry quoted NBSK pulp net price in China was approximately $798 per ADMT. Prices for China are net of discounts, allowances and rebates.
Previous wording
In our solid wood segment, we currently expect U.S. and European lumber prices to increase in the fourth quarter of 2024 due to modestly stronger demand and reduced supply and pallet prices to remain flat due to weak economic conditions in Europe. We currently expect relatively steady mass timber prices in the fourth quarter of 2024.
Current wording
QUARTERLY REPORT - PAGE 21 slightly increase in the second quarter of 2025 due to higher per unit fiber costs. In the second quarter of 2025, we currently expect pallet prices to remain flat due to continued weak economic conditions in Europe and mass timber prices to remain relatively stable.
Previous wording
The following table provides a reconciliation of net loss to operating income (loss) and Operating EBITDA for the periods indicated:
Current wording
Operating EBITDA is a non-GAAP measure. See “Non-GAAP Financial Measures” for its description, limitation and why we consider it to be a useful measure. The following table provides a reconciliation of net loss to operating income (loss) and Operating EBITDA for the periods indicated:
Previous wording
Sales realizations after customer discounts, rebates and other selling concessions. Incorporates the effect of pulp price variations occurring between the order and shipment dates.
Current wording
Sales realizations after customer discounts, rebates and other selling concessions.
Previous wording
Does not include our 50% joint venture interest in the Cariboo Pulp & Paper Company mill (“CPP”), which is accounted for using the equity method. In the first quarter of 2024, we disposed of our investment in CPP.
Current wording
Does not include our 50% joint venture interest in the Cariboo Pulp & Paper Company mill (“CPP”), which was accounted for using the equity method. In the first quarter of 2024, we disposed of this interest.
Previous wording
In the third quarter of 2024, cost of sales depreciation and amortization was flat at $41.5 million compared to $40.9 million in the same quarter of 2023.
Current wording
In the first quarter of 2025, cost of sales depreciation and amortization was relatively flat at $40.3 million compared to $40.4 million in the same quarter of 2024.
Previous wording
Selling, general and administrative expenses decreased slightly to $29.2 million in the third quarter of 2024 from $30.1 million in the same quarter of 2023 primarily due to lower employee compensation.
Current wording
Selling, general and administrative expenses decreased by approximately 6% to $29.7 million in the first quarter of 2025 from $31.7 million in the same quarter of 2024 primarily as a result of decreased selling costs due to lower pulp sales volumes.
Previous wording
In the nine months ended September 30, 2024, primarily as a result of the effect of a strengthening dollar on our Canadian dollar denominated costs and expenses, we had a positive impact of approximately $5.1 million in operating income due to foreign exchange compared to the same period of 2023.
Current wording
In the first quarter of 2025, we had a positive foreign exchange impact of approximately $9.7 million on operating income compared to the same quarter of 2024 primarily as a result of the effect of a stronger dollar on our Canadian dollar and euro denominated costs and expenses.
Previous wording
In the third quarter of 2024, other expenses were $0.1 million compared to other income of $3.3 million in the same quarter of 2023. Other expenses in the third quarter of 2024 primarily consisted of foreign exchange losses on dollar denominated cash held at our operations as the dollar weakened at the end of the third quarter of 2024 mostly offset by interest earned on cash. In the third quarter of 2023, other income primarily consisted of interest earned on cash.
Current wording
In the first quarter of 2025, other expenses was $0.2 million compared to other income of $4.9 million in the same quarter of 2024. Other expenses in the first quarter of 2025 primarily consisted of foreign exchange losses on dollar denominated cash held at our operations as the dollar weakened against the euro at the end of the period mostly offset by interest earned on cash in the quarter. In the same quarter of 2024, other income primarily consisted of interest earned on cash and foreign exchange gains on dollar denominated cash held at our operations.
Previous wording
In the third quarter of 2024, we had an income tax recovery of $0.1 million, or an effective tax rate of 1%, and in the same quarter of 2023, we had an income tax provision of $4.0 million, on a loss before income taxes. Our effective tax rates were different from the statutory rates of the jurisdictions in which we operate as we do not recognize tax recoveries for certain entities which we do not expect to realize a tax benefit.
Current wording
During the first quarter of 2025, we had an income tax provision of $0.7 million on a loss before income tax of $21.6 million as we do not recognize a tax recovery for certain entities which we do not expect to realize a tax benefit. In the same quarter of 2024, we had an income tax recovery of $6.4 million, or an effective tax rate of 28%.
Previous wording
In the nine months ended September 30, 2024, our net loss was $101.8 million, or $1.53 per share, compared to $154.8 million, or $2.33 per share in the same period of 2023. The net loss in the nine months ended September 30, 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.
Current wording
In the first quarter of 2025, our net loss was $22.3 million, or $0.33 per share, compared to $16.7 million, or $0.25 per share in the same quarter of 2024. The net loss in the first quarter of 2024 included the non-cash loss of $23.6 million, or $0.35 per share, recognized in connection with the dissolution of the CPP joint venture.
Previous wording
In the third quarter of 2024, Operating EBITDA increased by approximately 35% to $50.5 million from $37.5 million in the same quarter of 2023 primarily due to higher pulp and manufactured products sales realizations partially offset by higher costs and expenses and lower pulp sales volumes as a result of unplanned downtime.
Current wording
In the first quarter of 2025, Operating EBITDA decreased by approximately 26% to $47.1 million from $63.6 million in the same quarter of 2024 primarily as a result of higher planned maintenance downtime and higher per unit fiber costs partially offset by higher pulp and lumber sales realizations and the positive impact of a stronger dollar on our Canadian dollar and euro denominated costs and expenses.
Previous wording
We estimate that annual maintenance downtime in the third quarter of 2024 adversely impacted our operating income by approximately $17.8 million, comprised of approximately $11.2 million in direct out-of-pocket expenses and the balance in reduced production. We estimate that unplanned downtime at the Peace River mill in the third quarter of 2024 adversely impacted our operating income by approximately $9.2 million in direct out-of-pocket expenses and reduced production.
Current wording
We estimate that annual maintenance downtime in the first quarter of 2025 adversely impacted our Segment Operating EBITDA by approximately $29.5 million, comprised of approximately $21.5 million in direct out-of-pocket expenses and the balance in reduced production.
Previous wording
Total pulp sales volumes in the third quarter of 2024 decreased by approximately 8% to 448,856 ADMTs from 487,199 ADMTs in the same quarter of 2023 primarily due to lower production.
Current wording
Total pulp sales volumes in the first quarter of 2025 decreased by approximately 16% to 477,879 ADMTs from 565,664 ADMTs in the same quarter of 2024 primarily due to lower production.
Previous wording
In the third 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. 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 $1,573 per ADMT and $1,762 per ADMT, respectively, in the third quarter of 2024 compared to approximately $1,160 per ADMT and $1,293 per ADMT, respectively, in the same quarter of 2023. Average NBSK pulp net prices in China were approximately $771 per ADMT in the third quarter of 2024 compared to approximately $680 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 first quarter of 2025, third-party industry quoted average list prices for NBSK pulp in Europe and North America and third-party industry quoted average net prices for NBSK pulp in China increased from the same quarter of 2024 primarily due to stable demand and supply constraints. Average list prices for NBSK pulp in Europe and North America were approximately $1,550 per ADMT and $1,753 per ADMT, respectively, in the first quarter of 2025 compared to approximately $1,400 per ADMT and $1,440 per ADMT, respectively, in the same quarter of 2024. Average NBSK net prices in China were approximately $793 per ADMT in the first quarter of 2025 compared to approximately $745 per ADMT in the same quarter of 2024. 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
In the nine months ended September 30, 2024, third party industry quoted average list prices for NBSK pulp increased in both Europe and North America from the same period of 2023. Third party industry quoted average net prices for NBSK pulp in China increased in the nine months ended September 30, 2024 compared to the same period of 2023. Average list prices for NBSK pulp in Europe and North America were approximately $1,525 per ADMT and $1,633 per ADMT, respectively, in the nine months ended September 30, 2024 compared to approximately $1,261 per ADMT and $1,493 per ADMT, respectively, in the same period of 2023. Average NBSK net prices in China were approximately $776 per ADMT in the nine months ended September 30, 2024 compared to approximately $746 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 wording
In the first quarter of 2025, third-party industry quoted average list prices for NBHK pulp increased in North America from the same quarter of 2024 due to stronger demand. Third-party industry quoted average net prices for NBHK pulp decreased in China in the first quarter of 2025 from the same quarter of 2024 as the market absorbed increased hardwood capacity. Third-party industry quoted average list prices for NBHK pulp in North America were approximately $1,268 per ADMT in the first quarter of 2025 compared to approximately $1,223 per ADMT in the same quarter of 2024. Third-party industry quoted average net prices for NBHK pulp in China were approximately $578 per ADMT in the first quarter of 2025 compared to approximately $662 per ADMT in the same quarter of 2024.
Previous wording
Our average NBSK pulp sales realizations in the third quarter of 2024 increased by approximately 22% to $814 per ADMT from $666 per ADMT in the same quarter of 2023. In the third quarter of 2024, average NBHK pulp sales realizations increased by approximately 19% to $632 per ADMT from $530 per ADMT in the same quarter of 2023.
Current wording
Our average NBSK pulp sales realizations in the first quarter of 2025 increased by approximately 7% to $783 per ADMT from $732 per ADMT in the same quarter of 2024 due to higher list prices in all of our key markets. In the first quarter of 2025, average NBHK pulp sales realizations decreased by approximately 10% to $570 per ADMT from $631 per ADMT in the same quarter of 2024 due to lower net prices in China.
Previous wording
In the third quarter of 2024, primarily due to the effect of a weaker dollar on dollar denominated receivables held by our mills, we had a negative impact of approximately $5.9 million in operating income driven by foreign exchange compared to the same quarter of 2023.
Current wording
In the first quarter of 2025, we had a positive foreign exchange impact of approximately $7.3 million on Segment Operating EBITDA compared to the same quarter of 2024 primarily as a result of the effect of a stronger dollar on our Canadian dollar and euro denominated costs and expenses compared to the same quarter of 2024.
Previous wording
In the third quarter of 2024, transportation costs for our pulp segment increased by approximately 6% to $36.5 million from $34.3 million in the same quarter of 2023 driven by higher freight rates partially offset by lower pulp sales volumes.
Current wording
Transportation costs for our pulp segment in the first quarter of 2025 decreased by approximately 19% to $35.4 million from $43.7 million in the same quarter of 2024 driven by lower pulp sales volumes partially offset by higher freight rates.
Previous wording
Solid wood segment revenues in the nine months ended September 30, 2024 modestly increased to $374.4 million from $366.6 million in the same period of 2023 as a result of higher manufactured products revenues partially offset by lower revenues from our other products.
Current wording
Solid wood segment revenues in the first quarter of 2025 modestly increased to $122.7 million from $119.0 million in the same quarter of 2024 as a result of higher lumber and manufactured products revenues partially offset by lower revenues from our other products.
Previous wording
Energy and chemical revenues in the third quarter of 2024 decreased by approximately 38% to $19.1 million from $30.8 million in the same quarter of 2023 primarily due to lower sales realizations and sales volumes.
Current wording
Lumber revenues in the first quarter of 2025 increased by approximately 17% to $65.4 million from $55.9 million in the same quarter of 2024 primarily due to higher sales realizations and sales volumes.
Previous wording
Energy, biofuels and wood residuals revenues in the nine months ended September 30, 2024 decreased by approximately 18% to $46.3 million from $56.2 million in the same period of 2023 as a result of lower sales realizations.
Current wording
Energy, biofuels and wood residuals revenues in the first quarter of 2025 decreased by approximately 17% to $15.3 million from $18.4 million in the same quarter of 2024 primarily as a result of lower sales volumes.
Previous wording
Pallet revenues in the third quarter of 2024 decreased by approximately 8% to $26.5 million from $28.8 million in the same quarter of 2023 as a result of lower sales volumes as weak economic conditions in Europe negatively impacted demand.
Current wording
Pallet revenues in the first quarter of 2025 decreased by approximately 17% to $23.2 million from $28.0 million in the same quarter of 2024 primarily due to lower sales volumes as weak economic conditions in Europe continue to negatively impact demand.
Previous wording
Lumber sales volumes in the nine months ended September 30, 2024 decreased by approximately 11% to 346.8 MMfbm from 388.4 MMfbm in the same period of 2023 primarily due to timing of sales.
Current wording
Lumber sales volumes in the first quarter of 2025 increased by approximately 8% to 130.9 MMfbm from 121.4 MMfbm in the same quarter of 2024 primarily due to timing of sales.
Previous wording
Average lumber sales realizations in the nine months ended September 30, 2024 increased by approximately 5% to $458 per Mfbm from $438 per Mfbm in the same period of 2023 driven by a modest increase in demand in both the U.S. and European markets. The U.S. market accounted for approximately 48% of our lumber revenues and approximately 41% of our lumber sales volumes in the nine months ended September 30, 2024. The majority of the balance of our lumber sales were to Europe.
Current wording
Average lumber sales realizations in the first quarter of 2025 increased by approximately 8% to $499 per Mfbm from $460 per Mfbm in the same quarter of 2024 driven by lower supply and stronger demand in both the U.S. and European markets. The U.S. market accounted for approximately 47% of our lumber revenues and approximately 39% of our lumber sales volumes in the first quarter of 2025. The majority of the balance of our lumber sales were to Europe.
Previous wording
Manufactured products sales realizations increased to $3,463 per m 3 in the third quarter of 2024 from $1,752 per m 3 in the same quarter of 2023 as a result of higher CLT and glulam sales realizations.
Current wording
Manufactured products sales realizations decreased by approximately 22% to $2,832 per m 3 in the first quarter of 2025 from $3,644 per m 3 in the same quarter of 2024 as the high-interest rate environment negatively impacted demand.
Previous wording
Fiber costs were approximately 70% of our lumber cash production costs in the third quarter of 2024. In the third quarter of 2024, per unit fiber costs for lumber production were relatively flat compared to the same quarter of 2023. We currently expect modestly increasing per unit fiber costs in the fourth quarter of 2024 due to strong demand.
Current wording
Fiber costs were approximately 80% of our lumber cash production costs in the first quarter of 2025. In the first quarter of 2025, per unit fiber costs for lumber production increased by approximately 12% compared to the same quarter of 2024 driven by strong demand. For the second quarter of 2025, we currently expect higher per unit fiber costs due to continued strong demand.
Previous wording
Transportation costs for our solid wood segment in the third quarter of 2024 decreased by approximately 9% to $12.6 million from $13.9 million in the same quarter of 2023 primarily as a result of lower sales volumes.
Current wording
Transportation costs for our solid wood segment in the first quarter of 2025 were flat at $13.3 million compared to $13.4 million in the same quarter of 2024.
Previous wording
We operate in a cyclical industry and our operating cash flows vary accordingly. Our principal operating cash expenditures are for fiber, labor and chemicals. Working capital levels fluctuate throughout the year and are affected by maintenance downtime, changing sales patterns, seasonality and the timing of receivables and sales and the payment of payables and expenses.
Current wording
We operate in a cyclical industry and our operating cash flows vary accordingly. Our principal operating cash expenditures are for production costs, such as fiber, chemicals and energy costs, and other material operating costs for maintenance, freight and labor. Working capital levels fluctuate throughout the year and are affected by maintenance downtime, changing sales patterns, seasonality and the timing of receivables and sales and the payment of payables and expenses.
Previous wording
Cash Flows from (used in) Operating Activities. Cash from operating activities was $19.0 million in the nine months ended September 30, 2024 compared to cash used in operating activities of $60.3 million in the same period of 2023. An increase in accounts receivable used cash of $40.9 million in the nine months ended September 30, 2024 and a decrease in accounts receivable provided cash of $89.1 million in the same period of 2023. In the nine months ended September 30, 2024, adjusting for inventory impairments of $4.0 million, a decrease in inventories provided cash of $25.2 million in the nine months ended September 30, 2024 and, adjusting for inventory impairments of $56.6 million, an increase in inventories used cash of $19.0 million in the same period of 2023. A decrease in accounts payable and accrued expenses used cash of $25.4 million in the nine months ended September 30, 2024 and $107.6 million in the same period of 2023.
Current wording
Cash Flows from (used in) Operating Activities. In the three months ended March 31, 2025, cash used in operating activities was $3.0 million compared to $29.2 million in the same quarter of 2024. An increase in accounts receivable used cash of $16.8 million in the three months ended March 31, 2025 and $63.7 million in the same quarter of 2024. An increase in inventories used cash of $6.9 million in the three months ended March 31, 2025 and a decrease in inventories provided cash of $0.1 million in the same quarter of 2024. An increase in accounts payable and accrued expenses provided cash of $28.4 million in the three months ended March 31, 2025 and $2.4 million in the same quarter of 2024. An increase in prepaid expenses and other used cash of $27.5 million in the three months ended March 31, 2025, primarily related to prepaid interest payments on our senior notes due 2028, and $1.1 million in the same quarter of 2024.
Previous wording
Cash Flows from (used in) Investing Activities. Investing activities in the nine months ended September 30, 2024 used cash of $60.5 million. In the nine months ended September 30, 2024, we incurred $63.6 million of capital expenditures primarily related to log yard upgrades and other strategic projects at our Torgau facility, equipment enhancements at our Peace River mill, optimization projects at our mass timber facilities and maintenance projects across all mills and facilities. In the nine months ended September 30, 2024, we received proceeds from the sale of property, plant and equipment of $5.2 million primarily related to the sale of land from our sandalwood business.
Current wording
Cash Flows from (used in) Investing Activities. In the three months ended March 31, 2025, investing activities used cash of $19.9 million. In the three months ended March 31, 2025, we incurred $20.1 million of capital expenditures primarily related to completion of the wood room project at our Celgar mill, log yard upgrades and other strategic projects at our Torgau facility and maintenance projects across all mills and facilities.
Previous wording
Cash Flows from (used in) Financing Activities. Financing activities in the nine months ended September 30, 2024 used cash of $33.7 million. In the nine months ended September 30, 2024, we repaid approximately $15.5 million under our revolving credit facilities and we paid dividends of $10.0 million.
Current wording
Cash Flows from (used in) Financing Activities. In the three months ended March 31, 2025, financing activities provided cash of $19.2 million. In the three months ended March 31, 2025, we borrowed approximately $21.8 million under our revolving credit facilities.
Previous wording
Interest on our senior notes due 2026 (the “2026 Senior Notes”) is paid semi-annually in January and July of each year. Interest on our senior notes due 2029 is paid semi-annually in February and August of each year. Interest on our 2028 Senior Notes is paid semi-annually in April and October of each year.
Current wording
Interest on our senior notes due 2028 is paid semi-annually in April and October of each year. Interest on our senior notes due 2029 is paid semi-annually in February and August of each year. Prior to their redemption in October 2024, interest on our senior notes due 2026 was paid semi-annually in January and July of each year.
Previous wording
As of September 30, 2024, we had cash and cash equivalents of $239.0 million, approximately $315.2 million available under our revolving credit facilities and aggregate liquidity of about $554.2 million.
Current wording
As of March 31, 2025, we had cash and cash equivalents of $181.5 million, approximately $289.2 million available under our revolving credit facilities and aggregate liquidity of about $470.7 million.
Previous wording
There were no material changes outside the ordinary course to any of our material contractual obligations during the nine months ended September 30, 2024.
Current wording
There were no material changes outside the ordinary course to any of our material contractual obligations during the three months ended March 31, 2025.
Previous wording
We translate foreign denominated assets and liabilities into dollars at the rate of exchange on the balance sheet date. Equity accounts are translated using historical exchange rates. Unrealized gains or losses from these translations are recorded in other comprehensive income (loss) and do not affect our net earnings.
Current wording
Equity accounts are translated using historical exchange rates. Unrealized gains or losses from these translations are recorded in other comprehensive income (loss) and do not affect our net earnings.
Previous wording
As a result of the strengthening of the dollar versus the Canadian dollar partially offset by the weakening of the dollar versus the euro as of September 30, 2024, we recorded a net non-cash decrease of $1.7 million in the carrying value of our net assets denominated in Canadian dollars and euros, consisting primarily of our property, plant and equipment. This non-cash decrease does not affect our net loss, Operating EBITDA or cash but is reflected in our other comprehensive income (loss) and as a decrease to our total equity. As a result, our accumulated other comprehensive loss increased to $133.1 million.
Current wording
As a result of a weaker dollar versus the euro as of March 31, 2025, we recorded a non-cash increase of $34.3 million in the carrying value of our net assets denominated in euros, consisting primarily of our property, plant and equipment. This non-cash increase does not affect our net loss, Operating EBITDA or cash but is reflected in our other comprehensive income (loss) and as an increase to our total equity. As a result, our accumulated other comprehensive loss decreased to $196.7 million.
Previous wording
Based upon the exchange rate as of September 30, 2024, the dollar has strengthened by approximately 2% against the Canadian dollar and weakened by approximately 1% against the euro since December 31, 2023. See “Quantitative and Qualitative Disclosures about Market Risk”.
Current wording
Based upon the exchange rate as of March 31, 2025, the dollar was relatively flat against the Canadian dollar and weakened by approximately 4% against the euro since December 31, 2024. See “Quantitative and Qualitative Disclosures about Market Risk”.
Previous wording
For information about our other significant and critical accounting policies, see our annual report on Form 10-K for the fiscal year ended December 31, 2023.
Current wording
For information about our significant and critical accounting policies, see our annual report on Form 10-K for the fiscal year ended December 31, 2024.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We translate foreign denominated assets and liabilities into dollars at the rate of exchange on the balance sheet date.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
During the nine months ended September 30, 2024, we had an income tax recovery of $5.2 million, or an effective tax rate of 5% primarily due to the non-deductibility of the non-cash goodwill impairment and because we do 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 $28.9 million, or an effective tax rate of 16% as we did not recognize a tax recovery for certain entities which we did not expect to realize a tax benefit.
Previous report — wording carried elsewhere
We estimate that annual maintenance downtime in the nine months ended September 30, 2024 adversely impacted our operating income by approximately $78.0 million, comprised of approximately $56.1 million in direct out-of-pocket expenses and the balance in reduced production. We estimate that unplanned downtime at the Peace River mill in the nine months ended September 30, 2024 adversely impacted our operating income by approximately $9.2 million in direct out-of-pocket expenses and reduced production.
Previous report — wording carried elsewhere
QUARTERLY REPORT - PAGE 42 short-term losses on product sales or cease production at one or more of our mills. Therefore, our profitability depends on managing our cost structure, particularly raw materials which represent a significant component of our operating costs and can fluctuate based upon factors beyond our control. If the prices of our products decline, or if prices for our raw materials increase, or both, our results of operations and cash flows could be materially adversely affected.