Mercer(US:MERC) Globenewswireยท2025-05-01 20:30Core Insights - Mercer International Inc. reported a significant decline in Operating EBITDA for Q1 2025, amounting to $47.1 million, down from $63.6 million in Q1 2024 and $99.2 million in Q4 2024 [2][14] - The company experienced a net loss of $22.3 million in Q1 2025, compared to a net loss of $16.7 million in Q1 2024 and a net income of $16.7 million in Q4 2024 [2][41] - The decline in financial performance was attributed to planned maintenance downtime at the Celgar mill and the impact of a weaker dollar against the euro [3][14] Financial Performance - 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 [12] - Costs and expenses decreased by approximately 10% to $500.2 million in Q1 2025 from $553.9 million in Q1 2024, influenced by lower pulp sales volumes and a stronger dollar [13] - The pulp segment's revenues decreased by approximately 12% to $381.1 million in Q1 2025 from $432.4 million in Q1 2024, mainly due to lower pulp revenues [18] Market Conditions - The pulp market showed continued strength, with third-party softwood pulp list prices increasing due to stable demand and global supply constraints [6] - Lumber sales realizations increased in both the U.S. and Europe during Q1 2025, driven by reduced supply and steady demand [7] - However, the company anticipates a modest decrease in lumber prices in the U.S. in Q2 2025 due to economic impacts on customer demand [7] Operational Insights - The company is implementing cost reduction initiatives targeting approximately $100 million in savings by the end of 2026 [5] - Planned maintenance downtime at the Celgar mill impacted production volumes, with 22 days of downtime in Q1 2025 [9][23] - The company expects to reduce inventories by $20 million in 2025 and has cut expected capital expenditures by $20 million [5] Segment Performance - The pulp segment's Operating EBITDA decreased by approximately 27% to $49.9 million in Q1 2025 from $68.5 million in Q1 2024, primarily due to higher planned maintenance downtime [17] - 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 modestly increased to $122.7 million in Q1 2025 from $119.0 million in Q1 2024, driven by higher lumber and manufactured products revenues [28] Liquidity and Capital Structure - As of March 31, 2025, the company had cash and cash equivalents of $181.5 million and total liquidity of approximately $470.7 million [33] - Total assets increased to $2.34 billion as of March 31, 2025, compared to $2.26 billion at the end of 2024 [33] - The company declared a quarterly dividend of $0.075 per share, to be paid on July 3, 2025 [35]