Cascades Inc.

Reported Q2 2026 net earnings per share were $0.21, versus a net loss per share of $0.03 in Q2 2025 and $0.38 in Q1 2026. Adjusted net earnings per share were $0.24, versus $0.19 last year and $0.07 in Q1. Adjusted cash flow from operations was $123 million, up 22% from $101 million a year ago. Packaging sales were $772 million, up 8% sequentially, with adjusted EBITDA of $120 million, up 16%, and EBITDA margin of 15.5% versus 14.4% in Q1. Tissue sales were $409 million, up 7.6% sequentially, with adjusted EBITDA of $35 million, up 6%, and EBITDA margin of 8.6%. For the quarter, net debt fell $22 million sequentially, leverage was 3.3x, and liquidity was $737 million. 2026 capex remains targeted at $150 million to $175 million, and first-half capex totaled $67 million. Management said Q3 consolidated results should improve sequentially, excluding tariff impacts, helped by seasonally higher volumes and selling price increases in both Packaging and Tissue. The company now expects annual run-rate adjusted EBITDA to exceed $600 million in the second half of 2026. It also said the tariff impact, if the announced 50% tariff remains in effect, should be no more than 5% of adjusted EBITDA run rate after mitigation. Asset sale proceeds reached $105 million in 2026 after a $9 million real estate sale, and the asset monetization target of $230 million was reiterated though timing moved to early 2027.

Hugues Simon struck an upbeat but cautious tone, saying Q2 was better than expected because of stronger execution and less volume risk than feared. He emphasized that both Packaging and Tissue improved sequentially, that the business is becoming more resilient, and that the company is focused on what it can control amid macro and geopolitical uncertainty. He also highlighted the operating turnaround at Bear Island and Pryor, the progress of pricing actions, and a stronger second-half setup.

Allan Hogg focused on the quarter’s financial bridge and balance-sheet actions. He cited $0.21 reported EPS, $0.24 adjusted EPS, $123 million of adjusted cash flow from operations, and a $22 million sequential reduction in net debt, with leverage at 3.3x and liquidity of $737 million. He also noted $67 million of capex in the first half, reaffirmed full-year capex of $150 million to $175 million, and said the company completed a $9 million real-estate sale, bringing 2026 asset-sale proceeds to $105 million. He added that Greenpac, Cascades, and the USD 260 million term loan all had maturity extensions completed on the same financial terms.

Analysts focused on how much of the Q3 Packaging improvement would come from seasonality versus pricing, and management said the quarter should benefit from higher seasonal demand, earlier price increases, and ongoing strong rolls demand, while cost inflation and some volume risk remain. On tariffs, management said the gross impact is still being assessed, but the net effect should be manageable and under 5% of adjusted EBITDA run rate with mitigation, including production shifts between Canada and U.S. facilities. Questions also addressed capital allocation and growth CapEx; management said the priority remains reducing debt toward a 2.5x to 3x debt-to-EBITDA range while keeping optionality for future Tissue or Packaging investments based on return.