May 14, 2009 / 11:05 AM / 8 years ago

UPDATE 2-Cascades posts Q1 profit, shares rise

* Q1 EPS C$0.38 vs loss of C$0.04/shr yr ago

* Q1 adj EPS C$0.22 vs loss of C$0.09/shr last year

* Sets dividend of C$0.04/shr

* Expects to benefit from seasonal demand pickup in Q2

* Shares rise 15 pct (Adds conference call details, share movement)

May 14 (Reuters) - Packaging and paper-products company Cascades Inc (CAS.TO) posted a quarterly profit, helped by higher selling prices, lower raw material and energy costs, and the depreciation of the Canadian dollar, sending its shares up 15 percent.

First-quarter profit was C$37 million, or 38 Canadian cents a share, compared with a loss of C$4 million, or 4 Canadian cents a share, in the year-ago period.

Excluding items, the company earned 22 Canadian cents a share.

Quarterly sales rose to C$970 million from C$959 million, reflecting the increase in selling prices and the depreciation of the Canadian dollar, which more than offset a 12 percent drop in shipments.

However, the company’s containerboard segment sales fell 10 percent to C$263 million due to lower volumes and selling prices, a company executive said on a conference call with analysts.

“We remain cautious in regards to short term business conditions considering the decrease in selling prices for certain of our products in recent months and the potential appreciation of the Canadian dollar,” Chief Executive Alain Lemaire said in a statement.

Sales at its tissue papers segment rose 24 percent to C$211 million.

Analysts on average expected earnings of 12 Canadian cents a share, excluding items, on revenue of C$897 million, according to Reuters Estimates.

The company, however, expects to benefit from the seasonal pickup in demand in the second quarter, Lemaire said.

The company’s boxboard segment, which contributed about C$336 million in revenue during the latest quarter, and the containerboard operations will continue to be hurt by current economic conditions, CEO of Cascades’ Norampac unit Mark Andre said on the call.

Last month, Cascades said its unit Norampac, which is the largest containerboard producer in Canada, will stop production at its Quebec-based plant, citing a fall in demand for corrugated products, affecting about 145 employees. [ID:nBNG501448]

“We anticipate to keep taking downtime to maintain the right level of inventory, however, we should continue to benefit from our cost-reduction program” Andre said.

The company expects consolidated capital expenditure in the range of C$100 million to C$120 million for the year.

The company’s shares, which have surged nearly 60 percent over the last one month, were up 11 percent at C$4.11 Thursday morning on the Toronto Stock Exchange. They had touched a high of C$4.23 earlier. (Reporting by Isheeta Sanghi in Bangalore; Editing by Deepak Kannan) ((isheeta.sanghi@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: isheeta.sanghi.thomsonreuters.com@reuters.net))

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below