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- **Q3 Financial Strain**: Negative EBITDA of $28M driven by $20M inventory impairment and $200/tonne NBSK-NBHK price gap.
- **Cost Savings Initiative**: $30M savings target by year-end 2025 under One Goal One Hundred program.
- **Mass Timber Momentum**: $80M backlog and 100+ projects poised for growth with AI/data center demand.
- **Trade Challenges**: Tariffs on Canadian and European lumber exacerbate supply constraints and cost pressures.

**【CFO Financial Summary】**
- Q3 2025 reported a negative EBITDA of $28 million, including a $20 million non-cash inventory impairment charge due to lower pulp prices.
- Pulp segment EBITDA was negative $13 million, driven by a $200/tonne price gap between NBSK and NBHK in China, leading to substitution and reduced demand.
- Solid wood segment EBITDA was negative $9 million, with lumber production down 4% due to maintenance and weak demand in Europe.
- Fiber costs remained high in Germany, while Canada faced supply constraints and increased logistics costs.

**【CEO Strategic Initiatives】**
- Launched the One Goal One Hundred program, targeting $100 million in cost savings by 2026, with $30 million expected by year-end 2025.
- Mass timber business shows promise with a $80 million backlog and 100+ projects in development, driven by AI and data center demand.
- Celgar mill benefits from U.S. fiber access, mitigating BC chip supply risks, while Peace River mill focuses on hardwood stability.

**【Q&A Highlights】**
- **Liquidity & Asset Sales**: No immediate asset sales planned due to unfavorable market conditions; focusing on working capital reductions and CapEx cuts.
- **CapEx Reductions**: 2026 CapEx expected to be $75 million, down from previous guidance, with shutdowns stretched to reduce operational pressure.
- **Mass Timber Growth**: North American mass timber demand set to surge with hyperscalers' $2.6 trillion data center investments, positioning Mercer for market leadership.
- **Trade Impact**: Tariffs on Canadian lumber (50% total duty) and European lumber (10% tariff) are causing supply curtailments and fiber cost inflation.


Mercer International Inc. (MERC) Q3 2025 Earnings Call Transcript

- **Q2 Results**: EBITDA loss of $21M driven by FX, lower pulp prices, and inventory impairment; 2025 CapEx cut to $100M.
- **Trade Impact**: Weaker USD and Chinese demand weakness caused $45M EBITDA decline vs. Q1.
- **Strategic Initiatives**: 
  - **Mass Timber**: $68M backlog, Q4 revenue ramp-up; 30% of North American CLT capacity.
  - **Carbon Capture**: $100M/year revenue potential from CO2 credits; 60%+ funding via grants.
  - **One Goal Program**: $5M savings YTD, targeting $100M by 2026.
- **Lumber Market**: Canadian sawmills at risk from duties; Mercer's German mills benefit from 40% U.S. lumber sales.
- **Dividend Suspension**: Temporary to prioritize debt reduction.

**【CFO Financial Commentary】**
- Q2 EBITDA: Negative $21 million (vs. +$47 million in Q1), driven by $26M FX loss, $8M lower pulp prices in China, and $11M inventory impairment.
- Pulp sales volumes down 51,000 tonnes (11%) due to weak global demand; production flat Q/Q.
- One Goal, One Hundred program: $5M cost savings achieved YTD, targeting $100M by end-2026.
- Cash consumption: $35M (vs. $3M in Q1), liquidity at $438M ($146M cash + $292M undrawn revolver).
- 2025 CapEx: $100M (maintenance, safety, Torgau expansion).

**【CEO Market Update】**
- Trade uncertainty & weaker USD caused $45M EBITDA decline vs. Q1; pulp prices in China hit lows, expected to stabilize in Q4.
- Mass Timber: $68M backlog, Q4 revenue ramp-up; 30% of North American CLT capacity.
- Carbon capture project at Peace River: Potential $100M/year revenue from CO2 credits; 60%+ funding via gov't grants.
- Dividend suspended temporarily to focus on debt reduction.

**【Q&A Highlights】**
- **Lumber duties**: Canadian sawmills at risk of curtailment, benefiting Mercer's German mills with 40% U.S. lumber sales.
- **Mass Timber**: $400M pipeline of projects, Q4 revenue growth; 2026 order book similar to 2023 levels.
- **Carbon capture**: $500M+ project cost, 50-50 JV with Svante; <10% equity needed due to grants.
- **Working capital**: Target $20M reduction; inventory management initiatives ongoing.
- **Liquidity**: No covenant concerns; >$100M headroom in German revolver.

Mercer International Inc. (MERC) Q2 2025 Earnings Conference Call Transcript

- **Q1 EBITDA Impact**: $30M loss from Celgar maintenance, offset by stable pulp prices and lumber production growth.
- **$100M Cost Savings Plan**: 2025 targets $40-50M savings, with mass timber expansion and efficiency initiatives.
- **Tariff Risks**: Monitoring U.S. Section 232 tariffs, preparing for U.S. dollar weakness and China demand slowdown.
- **Market Outlook**: Softwood supply constraints support prices, mass timber orders up $24M with 2026 expansion plans.
- **Liquidity Strong**: $471M liquidity, $0.075/share dividend declared for July 2025.

**【CFO Financial Overview】**
- Q1 2025 EBITDA: $47 million (vs. $99 million in Q4 2024), primarily due to 22 days of planned maintenance at Celgar mill, costing ~$30 million in direct costs and lost production.
- Pulp segment EBITDA: $50 million (flat NBSK prices with lagged realization benefits).
- Solid wood segment EBITDA: Break-even (lumber price increases offset by weak pallet demand).
- Fiber costs: Stable for pulp, 10% increase for solid wood in Germany due to sawlog demand.
- Net loss: $22 million ($0.33/share) vs. $17 million profit in Q4.
- Cash consumption: $3 million (vs. $54 million in Q4), with $471 million liquidity ($182M cash + $289M undrawn revolver).
- Dividend: $0.075/share, payable July 2025.

**【CEO Strategic Initiatives】**
- **$100M Cost Savings by 2026**: 
  - $20M inventory reduction, $20M CapEx cuts, $60M operational efficiency gains.
  - 2025 targets: $40-50M savings (e.g., Torgau lumber expansion, Celgar woodroom upgrade).
- **Tariff Mitigation**: 
  - No direct U.S. tariffs on current exports, but monitoring Section 232 (due Nov 2025).
  - Canada-U.S. wood chip trade exempt from counter-tariffs.
  - Contingency plans for U.S. dollar weakness and market demand shifts.
- **Market Dynamics**: 
  - Softwood pulp supply constrained, limiting substitution with hardwood.
  - China hardwood prices rising ($793/tonne), widening gap vs. softwood ($215/tonne).
  - Mass timber order backlog: $24 million, targeting 2026 two-shift production.
- **Maintenance Schedule**: 
  - 2025 downtime: 79 days (vs. 57 in 2024), including 18 days at Peace River and 3 days at Stendal.
  - 2026 outlook: Potential 18-month maintenance cycles for key mills.

**【Q&A Key Themes】**
- **Tariff Secondary Effects**: 
  - U.S. dollar weakness impacts purchasing power, China demand slowdown.
  - European lumber exports to U.S. may face tariffs, favoring German mills.
- **Pricing Lag**: 
  - Q2 pulp prices expected to modestly rise, with Q1 lagged realization benefits.
  - Lumber prices stable in U.S., but European demand constrained by high interest rates.
- **Cost Structure**: 
  - $1.5M/day EBITDA impact from maintenance (e.g., Celgar shutdown cost $30M).
  - 2025 CapEx: $100M (maintenance, safety, lignin pilot plant).
- **Mass Timber Growth**: 
  - 30% of North American CLT capacity, targeting 2026 two-shift production.
  - Order backlog: $24M, driven by U.S. and European construction projects.


Mercer International (MERC)-2 May 25-2025 Q1 Earnings call transcript

- **Q4 EBITDA Surges**: $99 million vs. $50 million Q3, driven by no maintenance downtime and currency tailwinds.
- **2024 EBITDA Soars**: $244 million vs. $17 million in 2023, reflecting stronger pulp markets and cost control.
- **Pulp Segment Strength**: NBSK sales volumes +29,000 tonnes QoQ, offsetting hardwood price declines.
- **Hardwood Floor Prices**: $550/tonne in China, with early 2025 price increases.
- **Tariff Resilience**: Celgar secures 40% U.S. chip imports; Europe maintains lumber market share in U.S.
- **Mass Timber Growth**: 2025 sales to match 2024 despite smaller project mix, with $36 million order backlog.
- **2025 Capital Plan**: $100-120 million for maintenance, safety, and expansion projects.

**【CEO Summary Section】**
- Q4 operating EBITDA reached $99 million, up from $50 million in Q3, driven by no major maintenance downtime, a strong U.S. dollar, and higher NBSK sales volumes.
- Full-year 2024 EBITDA surged to $244 million, up from $17 million in 2023, due to stronger pulp markets, lower production costs, and cost reduction initiatives.
- Pulp segment EBITDA was $106 million in Q4, while Solid Wood segment reported a $5 million loss.
- Q4 NBSK sales realizations were $794/tonne (down 2.4% QoQ), with North America and Europe list prices down $75/tonne each.
- Hardwood pulp prices hit a floor of $550/tonne in China, with early 2025 price increases observed.
- 2025 capital spending projected at $100-120 million, focused on maintenance, environmental, and safety projects.
- Dividend of $0.075/share declared for Q1 2025.

**【CFO Financial Commentary】**
- Q4 net income was $17 million ($0.25/share), up from a $18 million loss in Q3.
- Full-year 2024 net loss was $85 million ($1.27/share), improved from $242 million in 2023.
- Q4 cash consumption was $54 million, with $100 million used to redeem $300 million 2026 senior notes.
- Liquidity ended Q4 at $489 million, down $66 million from Q3.
- 2025 leverage reduction initiative underway, with $200 million 2028 senior notes issued.

**【Q&A Key Themes】**
- **Fiber Costs**: Canada pulp fiber costs stable, Germany sawlog costs +10% in 2025; Solid Wood segment fiber costs +10% Q1 2025.
- **Tariff Mitigation**: U.S. chip imports for Celgar (40% of wood chips) secured via long-term contracts; Europe's competitive position in U.S. lumber market preserved.
- **Mass Timber Outlook**: 2025 sales expected to match 2024 ($100 million), despite smaller project mix; order backlog at $36 million.
- **Pulp Market Dynamics**: Softwood/hardwood price gap in China widened to $220/tonne (vs. historical $100), driven by supply-demand imbalance.
- **2025 Maintenance Schedule**: 78 days of planned downtime across mills, up from 57 days in 2024, to optimize production and costs.

Mercer International (MERC)-21 Feb 25-2024 Q4 Earnings call transcript

Mercer International (MERC)-1 Nov 24-2024 Q3 Earnings call transcript

Mercer International (MERC)-9 Aug 24-2024 Q2 Earnings call transcript

Mercer International (MERC)-10 May 24-2024 Q1 Earnings call transcript

Mercer International (MERC)-16 Feb 24-2023 Q4 Earnings call transcript

Mercer International (MERC)-3 Nov 23-2023 Q3 Earnings call transcript

Mercer International (MERC)-4 Aug 23-2023 Q2 Earnings call transcript

Mercer International (MERC)-5 May 23-2023 Q1 Earnings call transcript

Mercer International (MERC)-17 Feb 23-2022 Q4 Earnings call transcript

Mercer International (MERC)-29 Oct 22-2022 Q3 Earnings call transcript

Mercer International (MERC)-29 Jul 22-2022 Q2 Earnings call transcript

Mercer International (MERC)-29 Apr 22-2022 Q1 Earnings call transcript

Mercer International (MERC)-18 Feb 22-2021 Q4 Earnings call transcript

Mercer International (MERC)-29 Oct 21-2021 Q3 Earnings call transcript

Mercer International (MERC)-1 Aug 21-2021 Q2 Earnings call transcript

Mercer International (MERC)-1 May 21-2021 Q1 Earnings call transcript

Mercer International (MERC)-17 Feb 21-2020 Q4 Earnings call transcript

Mercer International (MERC)-30 Oct 20-2020 Q3 Earnings call transcript

Mercer International (MERC)-31 Jul 20-2020 Q2 Earnings call transcript

Mercer International (MERC)-1 May 20-2020 Q1 Earnings call transcript

Mercer International (MERC)-14 Feb 20-2019 Q4 Earnings call transcript

Mercer International (MERC)-1 Nov 19-2019 Q3 Earnings call transcript

Mercer International (MERC)-2 Aug 19-2019 Q2 Earnings call transcript

Mercer International (MERC)-3 May 19-2019 Q1 Earnings call transcript

Mercer International (MERC)-15 Feb 19-2018 Q4 Earnings call transcript

Mercer International (MERC)-26 Oct 18-2018 Q3 Earnings call transcript

Mercer International (MERC)-27 Jul 18-2018 Q2 Earnings call transcript

Mercer International (MERC)-4 May 18-2018 Q1 Earnings call transcript

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