Mercer International Inc. Reports Second Quarter 2025 Results
Rhea-AI Summary
Mercer International (Nasdaq: MERC) reported challenging Q2 2025 results with an Operating EBITDA of negative $20.9 million compared to positive $30.4 million in Q2 2024. The company posted a net loss of $86.1 million ($1.29 per share), wider than the $67.6 million loss in Q2 2024.
Key developments include the implementation of "One Goal One Hundred" program targeting $100 million in cost savings by 2026, with $5 million realized to date and $25 million expected by end of 2025. Due to market uncertainty, Mercer is suspending its quarterly dividend.
Q2 performance was impacted by weaker pulp demand in China, currency headwinds ($26 million negative impact), and an $11 million non-cash impairment on hardwood inventory. Total revenues decreased 9% to $453.5 million, while costs decreased 6% to $511.9 million compared to Q2 2024.
Positive
- Implementation of 'One Goal One Hundred' cost savings program targeting $100 million by 2026
- Lumber sales realizations increased in both U.S. and Europe markets
- Mass timber business maintains healthy order book with increasing project bid win rates
- Total pulp production increased 8% to 457,117 ADMTs compared to Q2 2024
Negative
- Operating EBITDA declined to negative $20.9 million from positive $30.4 million in Q2 2024
- Net loss widened to $86.1 million ($1.29 per share)
- Quarterly dividend suspended due to market uncertainty
- $11 million non-cash impairment on hardwood inventory
- Total revenues decreased 9% to $453.5 million
- Negative $26 million currency impact from weaker dollar
News Market Reaction 22 Alerts
On the day this news was published, MERC declined 18.60%, reflecting a significant negative market reaction. Argus tracked a trough of -19.8% from its starting point during tracking. Our momentum scanner triggered 22 alerts that day, indicating elevated trading interest and price volatility. This price movement removed approximately $57M from the company's valuation, bringing the market cap to $248M at that time. Trading volume was very high at 3.1x the daily average, suggesting heavy selling pressure.
Data tracked by StockTitan Argus on the day of publication.
Selected Highlights
- Second quarter Operating EBITDA* of negative
$20.9 million (net loss of$86.1 million ) compared to positive$30.4 million (net loss of$67.6 million ) in the same quarter of 2024 - Progressing "One Goal One Hundred" program targeting
$100 million in cost savings and operational efficiency actions - Second quarter results negatively impacted by a weaker dollar and the current challenges in the global trade environment affecting pulp demand
- In light of ongoing market uncertainty, pausing quarterly dividend with view to prudently allocate capital
NEW YORK, July 31, 2025 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) today reported second quarter 2025 Operating EBITDA of negative
In the second quarter of 2025, net loss was
Mr. Juan Carlos Bueno, Chief Executive Officer, stated: "Our operating results for the second quarter of 2025 reflect the impacts of ongoing uncertainties in the global trade environment coupled with the resulting weaker dollar. This challenging backdrop contributed to weaker demand for pulp in China during the quarter. The related depreciation of the dollar relative to the euro and Canadian dollar had a negative impact of approximately
We are actively monitoring developments in the U.S. and international trade policy landscape, including tariffs, countermeasures and countervailing duties. These efforts continue to focus on, among other things, proactively engaging with customers and preparing actions to mitigate potential exposures and leveraging opportunities presented by our geographic diversity.
As previously announced, we have implemented cost reduction initiatives and operational efficiency measures to build resiliency through this economic cycle. We refer to this program internally as "One Goal One Hundred", reflecting our entire team's steadfast commitment to achieving our target of
In the second quarter of 2025, third-party softwood pulp list prices in Europe remained relatively steady compared to the first quarter of 2025, while North America saw a modest increase driven by stable demand and supply constraints. In China, third-party pulp net prices decreased in the second quarter of 2025 as a result of weakened demand stemming from global trade policy uncertainty. As we enter into the third quarter of 2025, we anticipate a decrease in softwood pulp prices across our key markets amidst the current economic environment and seasonality. For hardwood pulp prices, we currently expect relatively steady prices in the third quarter of 2025.
Our lumber sales realizations in both the U.S. and Europe increased in the second quarter of 2025 as a result of lower supply and steady demand. We currently expect lumber prices to increase in the U.S. in the third quarter of 2025 as a result of duties imposed on lumber imports from Canada and reduced supply. In Europe, we currently expect lumber prices to modestly increase in the third quarter due to strong demand and higher fiber costs.
Overall, per unit fiber costs for our pulp and solid wood segments increased in the second quarter of 2025 primarily due to strong demand. In the third quarter of 2025, we currently anticipate per unit fiber costs for our German pulp mills to be lower driven by reduced demand and our Canadian pulp mills to be relatively stable. For our solid wood segment, we currently expect per unit fiber costs for our German operations to increase marginally due to a temporary reduction in regional logging and continued strong demand.
In the second quarter of 2025, our pulp mills had 29 days of downtime (approximately 40,900 ADMTs), which included 23 days of planned annual maintenance and six additional days due to slower than expected start-up. We currently expect a total of 18 days of planned annual maintenance downtime at our pulp mills in the third quarter of 2025.
Our solid wood segment results continue to be negatively impacted by weak demand driven by elevated interest rates and challenging economic conditions in Europe. However, we are beginning to see moderate growth in this market. We continue to expect significantly improved segment performance when the interest rate environment improves. In our solid wood segment, our mass timber business has maintained a healthy order book despite the ongoing elevated interest rate environment in the U.S. In that business, we are seeing a significant increase in "win rate" on new project bids, which should positively impact results in 2026."
Mr. Bueno concluded: "Despite the temporary and unpredictable market and global trade policy related challenges that persist into the third quarter, we remain focused on our aggregate liquidity and debt reduction strategy. Our team has made good progress to date on our "One Goal One Hundred" profitability improvement program and pursues efforts to preserve cash. We are taking the added step of suspending our quarterly dividend. We view this as prudent from a capital allocation standpoint as we navigate the uncertain global trade environment. We reiterate our long-term commitment to a competitive dividend as these uncertainties are resolved."
____________________
*Operating EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States ("GAAP") and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. See page 6 of the financial tables included in this press release for a reconciliation of net loss to Operating EBITDA.
Consolidated Financial Results
| Q2 | Q1 | Q2 | YTD | YTD | ||||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||
| Revenues | $ | 453,524 | $ | 506,974 | $ | 499,384 | $ | 960,498 | $ | 1,052,814 | ||||||||||
| Operating income (loss) | $ | (58,404 | ) | $ | 6,733 | $ | (43,779 | ) | $ | (51,671 | ) | $ | (44,227 | ) | ||||||
| Operating EBITDA | $ | (20,881 | ) | $ | 47,088 | $ | 30,439 | $ | 26,207 | $ | 94,040 | |||||||||
| Net loss | $ | (86,071 | ) | $ | (22,339 | ) | $ | (67,586 | ) | $ | (108,410 | ) | $ | (84,289 | ) | |||||
| Net loss per common share | ||||||||||||||||||||
| Basic | $ | (1.29 | ) | $ | (0.33 | ) | $ | (1.01 | ) | $ | (1.62 | ) | $ | (1.26 | ) | |||||
| Diluted | $ | (1.29 | ) | $ | (0.33 | ) | $ | (1.01 | ) | $ | (1.62 | ) | $ | (1.26 | ) | |||||
Consolidated – Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Total revenues for the second quarter of 2025 decreased by approximately
Costs and expenses in the second quarter of 2025 decreased by approximately
In the second quarter of 2025, Operating EBITDA decreased to negative
Segment Results
Pulp
| Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Pulp revenues | $ | 313,705 | $ | 346,808 | ||||
| Energy and chemical revenues | $ | 18,603 | $ | 20,563 | ||||
| Segment Operating EBITDA(1) | $ | (10,262 | ) | $ | 31,674 | |||
______________
(1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
In the second quarter of 2025, Segment Operating EBITDA for our pulp segment decreased to negative
Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the second quarter of 2025 decreased by approximately
Pulp revenues in the second quarter of 2025 decreased by approximately
In the second quarter of 2025, the third-party industry quoted average list price for NBSK pulp in Europe was relatively flat compared to the same quarter of 2024. In the second quarter of 2025, the third-party industry quoted average list price for NBSK pulp in North America increased from the same quarter of 2024 due to stronger demand and supply constraints. In the second quarter of 2025, the third-party industry quoted average net price for NBSK pulp in China decreased from the same quarter of 2024 as a result of weaker demand driven by the current economic climate and global trade policy uncertainty. Our average NBSK pulp sales realizations in the second quarter of 2025 decreased by approximately
In the second quarter of 2025, the third-party industry quoted average list price for NBHK pulp in North America decreased from the same quarter of 2024 due to weaker demand. In the second quarter of 2025, the third-party industry quoted average net price for NBHK pulp in China decreased from the same quarter of 2024 driven by weak demand due to the current economic climate and global trade policy uncertainty. In the second quarter of 2025, average NBHK pulp sales realizations decreased by approximately
Total pulp sales volumes in the second quarter of 2025 were relatively flat at 426,731 ADMTs compared to 433,320 ADMTs in the same quarter of 2024.
Energy and chemical revenues in the second quarter of 2025 decreased by approximately
Costs and expenses in the second quarter of 2025 were relatively flat at
Total pulp production in the second quarter of 2025 increased by approximately
Overall average per unit fiber costs in the second quarter of 2025 increased by approximately
Solid Wood
| Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Lumber revenues | $ | 66,332 | $ | 53,910 | ||||
| Energy revenues | $ | 4,242 | $ | 4,301 | ||||
| Manufactured products revenues(1) | $ | 12,418 | $ | 35,381 | ||||
| Pallet revenues | $ | 26,586 | $ | 26,741 | ||||
| Biofuels revenues(2) | $ | 5,095 | $ | 8,155 | ||||
| Wood residuals revenues | $ | 2,595 | $ | 1,750 | ||||
| Segment Operating EBITDA(3) | $ | (4,861 | ) | $ | 3,124 | |||
______________
(1) Manufactured products primarily include cross-laminated timber ("CLT") and glue-laminated timber ("glulam").
(2) Biofuels include pellets and briquettes.
(3) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
In the second quarter of 2025, Segment Operating EBITDA for the solid wood segment decreased to negative
Solid wood segment revenues in the second quarter of 2025 decreased by approximately
In the second quarter of 2025, lumber revenues increased by approximately
Lumber sales volumes in the second quarter of 2025 modestly increased by approximately
In the second quarter of 2025, manufactured products revenues decreased by approximately
Lumber production in the second quarter of 2025 increased by approximately
Fiber costs were approximately
Consolidated – Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Total revenues for the first half of 2025 decreased by approximately
Costs and expenses in the first half of 2025 decreased by approximately
In the first half of 2025, Operating EBITDA decreased to
Liquidity
As of June 30, 2025, we had cash and cash equivalents of
The following table is a summary of selected financial information as of the dates indicated:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Cash and cash equivalents | $ | 146,499 | $ | 184,925 | ||||
| Working capital | $ | 635,485 | $ | 653,466 | ||||
| Total assets | $ | 2,378,376 | $ | 2,262,932 | ||||
| Long-term liabilities | $ | 1,629,767 | $ | 1,576,619 | ||||
| Total shareholders' equity | $ | 446,491 | $ | 429,775 | ||||
Earnings Release Call
In conjunction with this release, Mercer International Inc. will host a conference call, which will be simultaneously broadcast live over the Internet. Management will host the call, which is scheduled for August 1, 2025 at 10:00 AM ET. Listeners can access the conference call live and archived for 30 days over the Internet at https://edge.media-server.com/mmc/p/wqsfh3kk or through a link on the company's home page at https://www.mercerint.com. Please allow 15 minutes prior to the call to visit the website and download and install any necessary audio software.
Mercer International Inc. is a global forest products company with operations in Germany, USA and Canada with consolidated annual production capacity of 2.1 million tonnes of pulp, 960 million board feet of lumber, 210 thousand cubic meters of CLT, 45 thousand cubic meters of glulam, 17 million pallets and 230 thousand tonnes of biofuels. To obtain further information on the company, please visit its website at https://www.mercerint.com.
The preceding includes forward-looking statements which involve known and unknown risks and uncertainties which may cause our actual results in future periods to differ materially from forecasted results. Words such as "expects", "anticipates", "are optimistic that", "projects", "intends", "designed", "will", "believes", "estimates", "may", "could" and variations of such words and similar expressions are intended to identify such forward-looking statements. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of our business, raw material costs, our level of indebtedness, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.
APPROVED BY:
William D. McCartney
Chairman
(604) 684-1099
Juan Carlos Bueno
Chief Executive Officer
(604) 684-1099
-FINANCIAL TABLES FOLLOW-
Summary Financial Highlights
| Q2 | Q1 | Q2 | YTD | YTD | ||||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||
| Revenues from external customers | ||||||||||||||||||||
| Pulp segment | $ | 332,308 | $ | 381,080 | $ | 367,371 | $ | 713,388 | $ | 799,775 | ||||||||||
| Solid wood segment | 117,268 | 122,720 | 130,238 | 239,988 | 249,261 | |||||||||||||||
| Corporate and other | 3,948 | 3,174 | 1,775 | 7,122 | 3,778 | |||||||||||||||
| Total revenues | $ | 453,524 | $ | 506,974 | $ | 499,384 | $ | 960,498 | $ | 1,052,814 | ||||||||||
| Pulp Segment Operating EBITDA(1) | $ | (10,262 | ) | $ | 49,872 | $ | 31,674 | $ | 39,610 | $ | 100,139 | |||||||||
| Solid wood Segment Operating EBITDA(1) | (4,861 | ) | (292 | ) | 3,124 | (5,153 | ) | 2,229 | ||||||||||||
| Corporate and other | (5,758 | ) | (2,492 | ) | (4,359 | ) | (8,250 | ) | (8,328 | ) | ||||||||||
| Operating EBITDA(2) | $ | (20,881 | ) | $ | 47,088 | $ | 30,439 | $ | 26,207 | $ | 94,040 | |||||||||
| Net loss | $ | (86,071 | ) | $ | (22,339 | ) | $ | (67,586 | ) | $ | (108,410 | ) | $ | (84,289 | ) | |||||
| Net loss per common share | ||||||||||||||||||||
| Basic | $ | (1.29 | ) | $ | (0.33 | ) | $ | (1.01 | ) | $ | (1.62 | ) | $ | (1.26 | ) | |||||
| Diluted | $ | (1.29 | ) | $ | (0.33 | ) | $ | (1.01 | ) | $ | (1.62 | ) | $ | (1.26 | ) | |||||
| Common shares outstanding at period end | 66,983 | 66,871 | 66,871 | 66,983 | 66,871 | |||||||||||||||
______________
(1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
(2) Operating EBITDA is not a measure of financial performance under GAAP and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. See page 6 of the financial tables included in this press release for a reconciliation of net loss to Operating EBITDA.
Summary Operating Highlights
| Q2 | Q1 | Q2 | YTD | YTD | ||||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||
| Pulp Segment | ||||||||||||||||||||
| Pulp production ('000 ADMTs) | ||||||||||||||||||||
| NBSK | 403.2 | 370.4 | 357.8 | 773.6 | 811.0 | |||||||||||||||
| NBHK | 53.9 | 88.5 | 63.9 | 142.4 | 149.6 | |||||||||||||||
| Annual maintenance downtime ('000 ADMTs) | 33.2 | 29.7 | 64.9 | 62.9 | 64.9 | |||||||||||||||
| Annual maintenance downtime (days) | 23 | 22 | 37 | 45 | 37 | |||||||||||||||
| Pulp sales ('000 ADMTs) | ||||||||||||||||||||
| NBSK | 361.4 | 388.1 | 377.6 | 749.5 | 865.8 | |||||||||||||||
| NBHK | 65.3 | 89.8 | 55.7 | 155.1 | 133.2 | |||||||||||||||
| Average NBSK pulp prices ($/ADMT)(1) | ||||||||||||||||||||
| Europe | 1,553 | 1,550 | 1,602 | 1,552 | 1,501 | |||||||||||||||
| China | 734 | 793 | 811 | 764 | 778 | |||||||||||||||
| North America | 1,820 | 1,753 | 1,697 | 1,787 | 1,568 | |||||||||||||||
| Average NBHK pulp prices ($/ADMT)(1) | ||||||||||||||||||||
| China | 533 | 578 | 735 | 556 | 698 | |||||||||||||||
| North America | 1,310 | 1,268 | 1,437 | 1,289 | 1,330 | |||||||||||||||
| Average pulp sales realizations ($/ADMT)(2) | ||||||||||||||||||||
| NBSK | 758 | 783 | 811 | 771 | 766 | |||||||||||||||
| NBHK | 575 | 570 | 701 | 572 | 660 | |||||||||||||||
| Energy production ('000 MWh)(3) | 511.1 | 527.1 | 493.9 | 1,038.1 | 1,070.4 | |||||||||||||||
| Energy sales ('000 MWh)(3) | 183.1 | 198.7 | 185.0 | 381.8 | 405.5 | |||||||||||||||
| Average energy sales realizations ($/MWh)(3) | 83 | 108 | 84 | 96 | 86 | |||||||||||||||
| Solid Wood Segment | ||||||||||||||||||||
| Lumber | ||||||||||||||||||||
| Production (MMfbm) | 120.2 | 128.0 | 111.4 | 248.2 | 238.4 | |||||||||||||||
| Sales (MMfbm) | 120.6 | 130.9 | 116.6 | 251.5 | 238.0 | |||||||||||||||
| Average sales realizations ($/Mfbm) | 550 | 499 | 463 | 524 | 461 | |||||||||||||||
| Energy | ||||||||||||||||||||
| Production and sales ('000 MWh) | 32.7 | 36.0 | 33.7 | 68.8 | 72.4 | |||||||||||||||
| Average sales realizations ($/MWh) | 130 | 135 | 128 | 132 | 126 | |||||||||||||||
| Manufactured products(4) | ||||||||||||||||||||
| Production ('000 cubic meters) | 7.8 | 7.1 | 11.1 | 14.9 | 18.4 | |||||||||||||||
| Sales ('000 cubic meters) | 8.1 | 5.9 | 11.2 | 14.0 | 15.2 | |||||||||||||||
| Average sales realizations ($/cubic meters) | 1,318 | 2,832 | 2,942 | 1,955 | 3,128 | |||||||||||||||
| Pallets | ||||||||||||||||||||
| Production ('000 units) | 2,132.9 | 2,096.4 | 2,547.8 | 4,229.3 | 5,604.1 | |||||||||||||||
| Sales ('000 units) | 2,248.0 | 2,128.8 | 2,570.4 | 4,376.8 | 5,486.7 | |||||||||||||||
| Average sales realizations ($/unit) | 12 | 11 | 10 | 11 | 10 | |||||||||||||||
| Biofuels(5) | ||||||||||||||||||||
| Production ('000 tonnes) | 25.2 | 44.5 | 41.0 | 69.7 | 78.9 | |||||||||||||||
| Sales ('000 tonnes) | 19.6 | 40.3 | 40.4 | 59.9 | 88.6 | |||||||||||||||
| Average sales realizations ($/tonne) | 260 | 229 | 202 | 239 | 219 | |||||||||||||||
| Average Spot Currency Exchange Rates | ||||||||||||||||||||
| $ / €(6) | 1.1342 | 1.0531 | 1.0766 | 1.0943 | 1.0810 | |||||||||||||||
| $ / C$(6) | 0.7225 | 0.6969 | 0.7310 | 0.7099 | 0.7362 | |||||||||||||||
______________
(1) Source: RISI pricing report. Europe and North America are list prices. China are net prices which include discounts, allowances and rebates.
(2) Sales realizations after customer discounts, rebates and other selling concessions.
(3) Does not include our
(4) Manufactured products primarily include CLT and glulam.
(5) Biofuels include pellets and briquettes.
(6) Average Federal Reserve Bank of New York Noon Buying Rates over the reporting period.
MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | 453,524 | $ | 499,384 | $ | 960,498 | $ | 1,052,814 | ||||||||
| Costs and expenses | ||||||||||||||||
| Cost of sales, excluding depreciation and amortization | 444,047 | 439,220 | 874,294 | 897,402 | ||||||||||||
| Cost of sales depreciation and amortization | 37,451 | 39,877 | 77,741 | 80,227 | ||||||||||||
| Selling, general and administrative expenses | 30,430 | 29,789 | 60,134 | 61,490 | ||||||||||||
| Loss on disposal of investment in joint venture | — | — | — | 23,645 | ||||||||||||
| Goodwill impairment | — | 34,277 | — | 34,277 | ||||||||||||
| Operating loss | (58,404 | ) | (43,779 | ) | (51,671 | ) | (44,227 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest expense | (28,411 | ) | (26,843 | ) | (56,566 | ) | (54,402 | ) | ||||||||
| Other income (expenses) | (1,120 | ) | 4,299 | (1,305 | ) | 9,238 | ||||||||||
| Total other expenses, net | (29,531 | ) | (22,544 | ) | (57,871 | ) | (45,164 | ) | ||||||||
| Loss before income taxes | (87,935 | ) | (66,323 | ) | (109,542 | ) | (89,391 | ) | ||||||||
| Income tax recovery (provision) | 1,864 | (1,263 | ) | 1,132 | 5,102 | |||||||||||
| Net loss | $ | (86,071 | ) | $ | (67,586 | ) | $ | (108,410 | ) | $ | (84,289 | ) | ||||
| Net loss per common share | ||||||||||||||||
| Basic | $ | (1.29 | ) | $ | (1.01 | ) | $ | (1.62 | ) | $ | (1.26 | ) | ||||
| Diluted | $ | (1.29 | ) | $ | (1.01 | ) | $ | (1.62 | ) | $ | (1.26 | ) | ||||
| Dividends declared per common share | $ | 0.075 | $ | 0.075 | $ | 0.150 | $ | 0.150 | ||||||||
| MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 146,499 | $ | 184,925 | ||||
| Accounts receivable, net | 335,394 | 327,345 | ||||||
| Inventories | 415,444 | 361,682 | ||||||
| Prepaid expenses and other | 21,461 | 17,601 | ||||||
| Assets classified as held for sale | 18,805 | 18,451 | ||||||
| Total current assets | 937,603 | 910,004 | ||||||
| Property, plant and equipment, net | 1,338,386 | 1,254,715 | ||||||
| Amortizable intangible assets, net | 52,277 | 49,829 | ||||||
| Operating lease right-of-use assets | 6,531 | 7,598 | ||||||
| Pension asset | 8,707 | 9,378 | ||||||
| Deferred income tax assets | 21,469 | 17,778 | ||||||
| Other long-term assets | 13,403 | 13,630 | ||||||
| Total assets | $ | 2,378,376 | $ | 2,262,932 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other | $ | 293,948 | $ | 248,661 | ||||
| Pension and other post-retirement benefit obligations | 772 | 732 | ||||||
| Liabilities associated with assets held for sale | 7,398 | 7,145 | ||||||
| Total current liabilities | 302,118 | 256,538 | ||||||
| Long-term debt | 1,526,743 | 1,473,986 | ||||||
| Pension and other post-retirement benefit obligations | 12,645 | 11,134 | ||||||
| Operating lease liabilities | 3,902 | 4,793 | ||||||
| Deferred income tax liabilities | 74,027 | 74,772 | ||||||
| Other long-term liabilities | 12,450 | 11,934 | ||||||
| Total liabilities | 1,931,885 | 1,833,157 | ||||||
| Shareholders’ equity | ||||||||
| Common shares | 66,871 | 66,850 | ||||||
| Additional paid-in capital | 364,871 | 362,782 | ||||||
| Retained earnings | 112,463 | 230,912 | ||||||
| Accumulated other comprehensive loss | (97,714 | ) | (230,769 | ) | ||||
| Total shareholders’ equity | 446,491 | 429,775 | ||||||
| Total liabilities and shareholders’ equity | $ | 2,378,376 | $ | 2,262,932 | ||||
| MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Cash flows from (used in) operating activities | ||||||||||||||||
| Net loss | $ | (86,071 | ) | $ | (67,586 | ) | $ | (108,410 | ) | $ | (84,289 | ) | ||||
| Adjustments to reconcile net loss to cash flows from operating activities | ||||||||||||||||
| Depreciation and amortization | 37,523 | 39,941 | 77,878 | 80,345 | ||||||||||||
| Deferred income tax provision (recovery) | (1,632 | ) | 7,322 | (11,138 | ) | (6,104 | ) | |||||||||
| Inventory impairment | 11,000 | — | 11,000 | — | ||||||||||||
| Loss on disposal of investment in joint venture | — | — | — | 23,645 | ||||||||||||
| Goodwill impairment | — | 34,277 | — | 34,277 | ||||||||||||
| Defined benefit pension plans and other post-retirement benefit plan expense | 175 | 431 | 344 | 641 | ||||||||||||
| Stock compensation expense | 1,036 | 1,403 | 2,042 | 3,432 | ||||||||||||
| Foreign exchange transaction losses (gains) | 9,361 | (3,382 | ) | 17,779 | (6,831 | ) | ||||||||||
| Other | 3,012 | 1,389 | 4,640 | 2,116 | ||||||||||||
| Defined benefit pension plans and other post-retirement benefit plan contributions | — | (288 | ) | — | (617 | ) | ||||||||||
| Changes in working capital | ||||||||||||||||
| Accounts receivable | 31,588 | 21,929 | 14,790 | (41,800 | ) | |||||||||||
| Inventories | (17,175 | ) | 4,506 | (24,066 | ) | 4,595 | ||||||||||
| Accounts payable and accrued expenses | (12,046 | ) | 15,718 | 16,386 | 18,108 | |||||||||||
| Prepaid expenses and other | 18,703 | 6,525 | (8,760 | ) | 5,473 | |||||||||||
| Net cash from (used in) operating activities | (4,526 | ) | 62,185 | (7,515 | ) | 32,991 | ||||||||||
| Cash flows from (used in) investing activities | ||||||||||||||||
| Purchase of property, plant and equipment | (24,331 | ) | (17,883 | ) | (44,413 | ) | (36,344 | ) | ||||||||
| Proceeds from government grants | 3,115 | — | 3,115 | 787 | ||||||||||||
| Other | (1,557 | ) | (2,271 | ) | (1,335 | ) | (2,081 | ) | ||||||||
| Net cash from (used in) investing activities | (22,773 | ) | (20,154 | ) | (42,633 | ) | (37,638 | ) | ||||||||
| Cash flows from (used in) financing activities | ||||||||||||||||
| Proceeds from (repayment of) revolving credit facilities, net | 3,607 | (44,965 | ) | 25,361 | (35,840 | ) | ||||||||||
| Dividend payments | (5,015 | ) | (5,014 | ) | (5,015 | ) | (5,014 | ) | ||||||||
| Payment of finance lease obligations | (2,405 | ) | (2,687 | ) | (4,913 | ) | (4,876 | ) | ||||||||
| Other | 545 | (614 | ) | 545 | (729 | ) | ||||||||||
| Net cash from (used in) financing activities | (3,268 | ) | (53,280 | ) | 15,978 | (46,459 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (4,407 | ) | 150 | (4,256 | ) | 287 | ||||||||||
| Net decrease in cash and cash equivalents | (34,974 | ) | (11,099 | ) | (38,426 | ) | (50,819 | ) | ||||||||
| Cash and cash equivalents, beginning of period | 181,473 | 274,272 | 184,925 | 313,992 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 146,499 | $ | 263,173 | $ | 146,499 | $ | 263,173 | ||||||||
MERCER INTERNATIONAL INC.
COMPUTATION OF OPERATING EBITDA
(Unaudited)
(In thousands)
Operating EBITDA is defined as operating income (loss) plus depreciation and amortization and long-lived asset impairment charges. Management uses Operating EBITDA as a benchmark measurement of its own operating results, and as a benchmark relative to its competitors. Management considers it to be a meaningful supplement to operating income (loss) as a performance measure primarily because depreciation expense and long-lived asset impairment charges are not actual cash costs, and depreciation expense varies widely from company to company in a manner that management considers largely independent of the underlying cost efficiency of our operating facilities. In addition, management believes Operating EBITDA is commonly used by securities analysts, investors and other interested parties to evaluate our financial performance.
Operating EBITDA does not reflect the impact of a number of items that affect our net loss, including financing costs, income taxes and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net loss or operating income (loss) as a measure of performance, nor as an alternative to net cash from (used in) operating activities as a measure of liquidity. Operating EBITDA is an internal measure and therefore may not be comparable to other companies.
Operating EBITDA is a non-GAAP financial measure at the consolidated level and is considered different from Operating EBITDA at the segment level, referred to as "Segment Operating EBITDA", which is our single measure of segment profit or loss presented in our financial statements under GAAP. For more information on Segment Operating EBITDA, refer to the segment information note within our consolidated financial statements.
The following table sets forth a reconciliation of net loss to Operating EBITDA for the periods indicated:
| Q2 | Q1 | Q2 | YTD | YTD | ||||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||
| Net loss | $ | (86,071 | ) | $ | (22,339 | ) | $ | (67,586 | ) | $ | (108,410 | ) | $ | (84,289 | ) | |||||
| Income tax provision (recovery) | (1,864 | ) | 732 | 1,263 | (1,132 | ) | (5,102 | ) | ||||||||||||
| Interest expense | 28,411 | 28,155 | 26,843 | 56,566 | 54,402 | |||||||||||||||
| Other expenses (income) | 1,120 | 185 | (4,299 | ) | 1,305 | (9,238 | ) | |||||||||||||
| Operating income (loss) | (58,404 | ) | 6,733 | (43,779 | ) | (51,671 | ) | (44,227 | ) | |||||||||||
| Add: Depreciation and amortization | 37,523 | 40,355 | 39,941 | 77,878 | 80,345 | |||||||||||||||
| Add: Loss on disposal of investment in joint venture | — | — | — | — | 23,645 | |||||||||||||||
| Add: Goodwill impairment | — | — | 34,277 | — | 34,277 | |||||||||||||||
| Operating EBITDA | $ | (20,881 | ) | $ | 47,088 | $ | 30,439 | $ | 26,207 | $ | 94,040 | |||||||||
FAQ
What were Mercer International's (MERC) key financial results for Q2 2025?
Why did Mercer International suspend its dividend in Q2 2025?
What is Mercer's 'One Goal One Hundred' program and its progress?
How did currency fluctuations impact Mercer's Q2 2025 results?
What were the main challenges affecting Mercer's pulp business in Q2 2025?
