Mercer International Inc (MERC) Reports Q3 and First Nine Months of 2023 Results
Operating EBITDA for Q3 2023 was $37.5 million, compared to $140.9 million in Q3 2022.
Net loss for Q3 2023 was $26.0 million, compared to net income of $66.7 million in Q3 2022.
Strong growth and integration of mass timber business continued.
Liquidity enhanced by completing $200 million 2028 senior note issue and expanding availability under German revolving credit facility by 70 million.
On November 2, 2023, Mercer International Inc (NASDAQ:MERC) reported its third quarter and first nine months of 2023 results. The company's Operating EBITDA in the third quarter was $37.5 million, a significant decrease from $140.9 million in the same quarter of 2022. The net loss for Q3 2023 was $26.0 million, compared to a net income of $66.7 million in Q3 2022.
Financial Performance
The company's revenues for Q3 2023 were $470.8 million, a decrease of approximately 12% from $532.8 million in Q3 2022. This was primarily due to lower pulp, energy, and lumber sales realizations, partially offset by higher sales volumes, the inclusion of Torgau, and higher manufactured product sales realizations.
Operating EBITDA for the first nine months of 2023 was negative $3.7 million, compared to positive $440.4 million in the same period of 2022. The net loss for the first nine months of 2023 was $154.8 million, compared to net income of $227.0 million in the same period of 2022.
Segment Results
In the pulp segment, operating income for Q3 2023 was $21.2 million, a significant decrease from $110.0 million in Q3 2022. This was primarily due to lower pulp and energy sales realizations and the negative impact of a weaker dollar, partially offset by lower per unit fiber, freight, and other production costs, higher sales volumes, and the receipt of insurance proceeds of $8.2 million.
In the solid wood segment, operating loss for Q3 2023 was $19.7 million, compared to operating income of $2.9 million in Q3 2022. This was primarily due to lower lumber and energy sales realizations, partially offset by higher manufactured products sales realizations.
Outlook and Strategy
Despite the challenges in the pulp and lumber markets, the company's CEO, Mr. Juan Carlos Bueno, expressed optimism about the future. He highlighted the strong growth in the company's mass timber business and the successful integration of new operations. He also noted that the company's liquidity position was reinforced by the completion of a private offering of the $200 million 2028 senior notes and an increase in the availability of the German revolving credit facility by 70 million.
Dividend Announcement
The company announced a quarterly cash dividend of $0.075 per share, to be paid on December 28, 2023, to all shareholders of record on December 20, 2023.
Explore the complete 8-K earnings release (here) from Mercer International Inc for further details.
This article first appeared on GuruFocus.
