Mercer(MERC) - 2025 Q1 - Quarterly Results

Financial Performance - First quarter 2025 Operating EBITDA was $47.1 million, down 26% from $63.6 million in Q1 2024 and 53% from $99.2 million in Q4 2024[2][5][16] - Net loss for Q1 2025 was $22.3 million ($0.33 per share), compared to a net loss of $16.7 million ($0.25 per share) in Q1 2024 and net income of $16.7 million ($0.25 per share) in Q4 2024[2][14] - Total revenues for Q1 2025 decreased by approximately 8% to $507.0 million from $553.4 million in Q1 2024, primarily due to lower pulp sales volumes[14] - The pulp segment generated revenues of $381.080 million in Q1 2025, compared to $432.404 million in Q1 2024, reflecting a decrease of approximately 11.9%[40] - Total revenues for Q1 2025 were $506.974 million, down from $553.430 million in Q1 2024, representing a decrease of about 8.4%[40] - Net loss for Q1 2025 was $22.339 million, compared to a net loss of $16.703 million in Q1 2024[46] - Operating EBITDA for Q1 2025 was $47,088 thousand, a decrease from $63,601 thousand in Q1 2024, reflecting a decline of approximately 26%[55] Revenue Breakdown - Pulp revenues in Q1 2025 decreased by approximately 13% to $357.0 million from $408.3 million in Q1 2024, driven by lower sales volumes[19][22] - Lumber revenues increased by approximately 17% to $65.4 million in Q1 2025 from $55.9 million in Q1 2024, attributed to higher sales realizations and volumes[29] - The solid wood segment's revenues increased to $122.7 million in Q1 2025 from $119.0 million in Q1 2024, primarily due to higher lumber and manufactured products revenues[28] - Average NBSK pulp sales realizations increased by approximately 7% to $783 per ADMT in Q1 2025 from $732 per ADMT in Q1 2024[20] - Average sales realizations for lumber in Q1 2025 were $499 per MMfbm, up from $460 per MMfbm in Q1 2024[42] Cost Management and Savings - The company is targeting approximately $100 million in cost savings by the end of 2026 through operational efficiency initiatives[5][7] - The company expects a reduction of inventories by $20 million and a decrease in capital expenditures by $20 million in 2025[7] - The company expects higher per unit fiber costs in Q2 2025 due to continued strong demand, with a 12% increase in fiber costs noted in Q1 2025 compared to Q1 2024[32] Production and Operational Impact - Planned maintenance downtime at the Celgar mill impacted production volumes by 22 days, resulting in a loss of approximately 29,700 ADMTs in Q1 2025[11][24] - Lumber production in Q1 2025 was 128.0 MMfbm, slightly up from 127.0 MMfbm in Q1 2024[42] - The company has a consolidated annual production capacity of 2.1 million tonnes of pulp and 960 million board feet of lumber[37] Liquidity and Assets - Cash and cash equivalents as of March 31, 2025, were $181.5 million, with total liquidity of approximately $470.7 million[33] - Total assets as of March 31, 2025, were $2.336 billion, an increase from $2.263 billion as of December 31, 2024[34] - Total assets increased to $2,336,167 thousand as of March 31, 2025, up from $2,262,932 thousand on December 31, 2024, representing a growth of approximately 3.2%[48] - Cash and cash equivalents decreased to $181,473 thousand at the end of Q1 2025, down from $184,925 thousand at the beginning of the period, a reduction of about 2.5%[50] Debt and Liabilities - Long-term debt increased to $1,503,203 thousand as of March 31, 2025, up from $1,473,986 thousand at the end of 2024, representing an increase of approximately 2%[48] - Total current liabilities rose to $298,382 thousand as of March 31, 2025, compared to $256,538 thousand at the end of 2024, an increase of approximately 16.3%[48] Shareholder Information - A quarterly dividend of $0.075 per share will be paid on July 3, 2025, to shareholders of record on June 26, 2025[35] Other Financial Metrics - The company reported a depreciation and amortization expense of $40,355 thousand for Q1 2025, slightly down from $40,404 thousand in Q1 2024[50] - The company experienced a foreign exchange transaction loss of $8,418 thousand in Q1 2025, compared to a gain of $3,449 thousand in Q1 2024[50] - Shareholders' equity increased to $437,351 thousand as of March 31, 2025, up from $429,775 thousand at the end of 2024, reflecting a growth of approximately 1.3%[48]