Tissue and cardboard maker Cascades Inc. reported its net profits rose fourfold in the latest quarter on higher sales and a big one-time gain from an asset disposition.
The Quebec-based forestry company said early Wednesday its net income rose to $117-million in the second quarter, or $1.21 per share.
That's a sharp improvement over the $28-million in net income, 29 cents per share, in the same quarter a year ago.
The main driver of the net profit increase was a $110-million after-tax gain from the divestiture of Dopaco, a paper cup and carton converting business for the quick-service restaurant and foodservice industries.
Excluding that gain and other one-time items, Cascades had a loss of $6-million or six cents a share in the latest quarter, compared with earnings of $26-million or 27 cents a year earlier.
Sales rose to $991-million from $808-million.
Cascades president and CEO Alain Lemaire said following a "challenging first quarter," he is encouraged to see the results start to rebound.
He says the improvement comes in spite of rising costs, including recycled fibre, the appreciation of the Canadian dollar and continuing weak demand for packaging.
Mr. Lemaire also said demand should slightly improve in the next quarter due to price increases in tissue paper, specialty products and North American boxboard segments.
"Following a challenging first quarter, we are encouraged by the fact that our results have started to rebound in spite of the rise of several of our costs, including the recycled fibre, the appreciation of the Canadian dollar and continuing weak demand for packaging," he said.
"Three of our four segments, and more particularly our tissue paper operations, experienced an improvement in their sequential financial performance. Moreover, we have taken other significant steps to improve profitability as demonstrated by the divestiture and the closure of three less-performing units. We will continue implementing optimization programs to support the progress observed in the past three months."
Cascades, with 11,000 employees, produces, converts and markets packaging and tissue composed mainly of recycled fibres. The company operates 100 plants and recycling centres in North America and Europe.