Mercer(US:MERC) Newsfilter·2025-02-20 21:30Core Insights - Mercer International Inc. reported a significant improvement in financial performance for Q4 2024, with Operating EBITDA reaching $99.2 million, up from $21.1 million in Q4 2023 and $50.5 million in Q3 2024 [2][3][11] - The company achieved a net income of $16.7 million in Q4 2024, a turnaround from a net loss of $87.2 million in Q4 2023 and a net loss of $17.6 million in Q3 2024 [3][11] - The CEO highlighted strong pulp market conditions and a stable demand outlook for softwood pulp, which is expected to drive sales realizations higher in Q1 2025 [4][10] Financial Performance - Total revenues for Q4 2024 increased by approximately 4% to $488.4 million from $470.5 million in Q4 2023, primarily due to higher pulp sales realizations [14] - Costs and expenses decreased by approximately 17% to $438.0 million in Q4 2024 from $526.9 million in Q4 2023, driven by lower pulp sales volumes and foreign exchange gains [15][22] - For the full year 2024, total revenues modestly increased to $2,043.4 million from $1,993.8 million in 2023, with Operating EBITDA rising to $243.7 million from $17.5 million [33][35] Segment Performance - In the pulp segment, revenues increased by approximately 3% to $375.5 million in Q4 2024 from $364.2 million in Q4 2023, driven by higher pulp revenues despite lower sales volumes [19] - The solid wood segment saw revenues increase by approximately 6% to $111.6 million in Q4 2024 from $105.4 million in Q4 2023, primarily due to higher lumber and biofuels revenues [28] - Lumber revenues increased by approximately 23% to $58.6 million in Q4 2024 from $47.8 million in Q4 2023, attributed to higher sales realizations and volumes [29] Market Conditions - Softwood pulp prices remained strong in Q4 2024, with expectations for modestly higher sales realizations in Q1 2025 due to stable demand and global supply constraints [4][10] - Hardwood pulp prices in China and North America decreased in Q4 2024 but are expected to trend upwards in Q1 2025 as maintenance season begins in Latin America [5] - Lumber prices are anticipated to increase in Q1 2025 due to stronger demand from certain European countries and limited North American supply [6] Liquidity and Debt Management - As of December 31, 2024, the company had aggregate liquidity of approximately $488.6 million, including cash and cash equivalents of $184.9 million [36] - The company successfully reduced long-term debt by over $100 million in 2024, focusing on debt reduction as a key goal moving forward [11][12]