Mercer International Inc. (Nasdaq: MERC, TSX: MRI.U) today reported results for the second quarter ended June 30, 2015. Operating EBITDA* in the second quarter of 2015 was $50.0 million, compared to $41.9 million in the comparative quarter of 2014 and $61.3 million in the prior quarter of 2015.
For the second quarter of 2015, net income was $16.4 million, or $0.25 per basic and diluted share, compared to $0.6 million, or $0.01 per basic and diluted share, in the comparative quarter of 2014.
Mr. David Gandossi, the Chief Executive Officer, stated: “Overall, our mills performed well in the second quarter of 2015. Our Rosenthal mill set a pulp production record in the first half of 2015 and our Celgar mill achieved its second highest quarterly level of pulp production in over two years. Our Stendal mill had 11 days of annual maintenance downtime in the second quarter of 2015, which resulted in marginally lower pulp and energy and chemical production and sales, compared to the first quarter of 2015.
In the second quarter of 2015, we had Operating EBITDA of $50.0 million, after giving effect to approximately $8.6 million in direct costs attributable to the Stendal mill’s annual maintenance downtime. Many of our competitors who report their financial results using International Financial Reporting Standards (“IFRS”) capitalize their direct costs of maintenance shutdowns.”
Mr. Gandossi continued: “In the second quarter of 2015, pulp sales volumes increased by 6%, compared to the first quarter of 2015, primarily due to our Celgar mill’s stronger sales to China, partially offset by slightly weaker demand in Europe. List prices for NBSK pulp in Europe were marginally lower in the second quarter of 2015, compared to the previous quarter, largely due to the strength of the U.S. dollar versus the euro. List prices for NBSK pulp in China increased in the current quarter from the first quarter of 2015, partially due to strong demand following the Chinese New Year holiday and seasonal factors. Increased Russian NBSK pulp production appears to have been absorbed more smoothly in the Chinese market than in the past. In addition, the price differential between hardwood and softwood pulp has narrowed significantly, which we believe favors NBSK producers.
At the end of the current quarter, world producer inventories of NBSK pulp were generally balanced at about 29 days’ supply and customer inventories were at normal to low levels. Going forward, we expect increased demand for NBSK pulp will be driven by new tissue machines coming online during 2015 and 2016.”