Cascades Q2 profit beats forecasts on 9% packaging volume surge

CANADA – Cascades has reported net earnings of C$21 million (US$15.5 million) in Q2 2026, swinging from a C$3 million loss a year earlier, as its packaging segment posted a 9 percent sequential volume increase and total sales rose 2.7 percent to C$1.22 billion (US$903 million).

The Canadian packaging and tissue products company’s adjusted earnings per share came in at C$0.24, beating the C$0.08 consensus forecast. 

Operating profit surged 61 percent to C$58 million (US$42.9 million), while adjusted EBITDA rose 2 percent to C$140 million (US$104 million). 

Packaging segment revenue reached C$772 million (US$571 million), up 1 percent year-over-year, while tissue sales grew 7.7 percent to C$409 million (US$303 million). 

Packaging Segment Drives Stronger-Than-Expected Performance

Packaging volumes tracked ahead of forecast assumptions, with total shipments increasing 9 percent sequentially, box shipments up 6 percent and external paper shipments rising 11 percent. CEO Hugues Simon stated that the company is “extremely, extremely tight” in fiber rolls, with demand exceeding shipping capacity. 

The Bear Island mill operated at 95 percent capacity, while Greenpac achieved record production levels. 

The packaging segment’s adjusted EBITDA margin improved to 15.5 percent from 14.4 percent in Q1, reflecting meaningful progress in onboarding new customers and a more favorable economic environment than initially anticipated.

Tissue Business and Pricing Momentum

Tissue segment sales reached C$409 million, benefiting from improved productivity and continuing cost-cutting initiatives. 

Away-from-home volumes grew faster than retail, consistent with the company’s investment focus at its Kingsey Falls, Granby and Pryor facilities. Cascades expects to achieve an annual run-rate adjusted EBITDA exceeding C$600 million (US$444 million) during the second half of 2026, supported by announced price increases in both packaging and tissue.

The company has implemented its third containerboard price increase of the year, with a C$110 per ton hike for linerboard scheduled for September.

Tariff Uncertainty and Financial Position

Net debt stood at C$1.8 billion (US$1.33 billion) as of June 30, down from C$1.9 billion at March 31.

The company’s C$230 million asset sale target is now expected to be met in early 2027.

Simon noted that new US tariffs on Canadian imports, effective August 19, could affect certain tissue and packaging products, with the financial impact not expected to exceed 5 percent of adjusted EBITDA run rate if mitigation efforts proceed as planned.

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