Mercer International Inc. (NASDAQ:MERC) Q1 2023 Earnings Conference Call May 5, 2023 10:00 AM ET

Company Participants

David Ure - SVP, Finance and CFO

Juan Carlos Bueno - President and CEO

Conference Call Participants

Sean Stewart - TD Securities

Paul Quinn - RBC Capital Markets

Hamir Patel - CIBC Capital Markets

Richard Stevens - Momenta

Operator

Good morning and welcome to Mercer International’s First Quarter 2023 Earnings Conference Call. On the call today is Juan Carlos Bueno, President and Chief Executive Officer of Mercer International with David Ure, Senior Vice President, Finance, Chief Financial Officer and Secretary.

I will now hand the call over to David Ure. Please go ahead.

David Ure

Good morning everyone. Thanks for joining us today. I will begin by touching on the financial and operating highlights of the first quarter, before returning the call to Juan Carlos to provide further color on the markets, our capital plan as well as our strategic initiatives. We're also pleased to have with us today Richard Short, who most of you know will become the company's next CFO when I step-out in June.

Also, for those of you that have joined today’s call by telephone, there is a presentation material that we’ve attached to the Investor section of our website.

But before turning to our results, I’d like to remind you that in this morning’s conference call, we will make forward-looking statements. And according to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, I’d like to call your attention to the risks related to these statements, which are more fully described in our press release and in the company’s filings with the Securities and Exchange Commission.

This quarter, we achieved EBITDA of approximately $28 million compared to Q4 EBITDA of $96 million. After adjusting for a $50 million non-cash incurred with inventory impairment, EBITDA [Indiscernible] The increase in Q1 from Q4 [Technical Difficulty]

All of our mills ran well this quarter with the freeze out saw mill achieving record production. We continue to see the benefits of our capital upgrades to the mill.

Our pulp segment contributed quarterly EBITDA of $40 million, while our solid wood segment's EBITDA was $7 million. You can find additional segment disclosures in our Form 10-Q, which can be found in our website and SEC.

In Q1, average NBSK and NBHK list price were down in all of our markets compared to Q4. Overall demand was relatively weak in the current quarter as customers reduced inventory levels in anticipation of lower prices and inflation and economic uncertainty negatively impacted paper demand.