Cascades Reports Higher Sales and Earnings in Second Quarter of 2026

Cascades Inc. (TSX: CAS) reported higher sales and improved profitability for the second quarter ended June 30, 2026, supported by stronger performance in its Packaging business, productivity gains, and ongoing cost reduction initiatives.

Second-quarter sales increased to $1.219 billion, compared with $1.187 billion in the same period of 2025. Operating income rose to $58 million from $36 million a year earlier, while adjusted EBITDA reached $140 million, up from $137 million in the prior-year quarter. Net earnings were $21 million, or $0.21 per common share, compared with a net loss of $3 million, or ($0.03) per share, in the second quarter of 2025. Adjusted net earnings totaled $24 million, or $0.24 per share.

President and CEO Hugues Simon said the quarter exceeded expectations, driven by solid production and demand across the company's packaging paper mill network, progress in onboarding new customers, and a more favourable economic environment than anticipated. He added that the Tissue business also performed slightly ahead of expectations, benefiting from improved productivity, higher sales volumes, and ongoing cost reduction measures.

Cascades reported net debt of $1.879 billion as of June 30, 2026, down from $1.901 billion at the end of the first quarter, while its net debt-to-adjusted EBITDA ratio remained stable at 3.3x. Capital expenditures totaled $40 million during the quarter, and the company maintained its 2026 capital expenditure forecast of $150 million to $175 million.

The company generated $5 million from asset sales during the quarter, bringing total proceeds to $154 million since the start of its 2025–2026 asset disposal program. Cascades said it now expects to achieve its $230 million asset sale target in early 2027.

Looking ahead, Cascades said it is assessing the potential impact of recently announced U.S. tariffs on certain imported products. Based on current information, some tissue and packaging products exported to the United States could be subject to the announced 50% tariffs. The company said it is implementing mitigation measures and currently believes the potential financial impact will be manageable.

Excluding the potential effect of the tariffs, Cascades said it now expects its annual run-rate adjusted EBITDA to exceed $600 million during the second half of 2026, above its original objective. The company also said previously announced selling price increases in both Packaging and Tissue businesses are progressing as planned, including a $50 per ton packaging price increase announced in June.

The Board of Directors declared a quarterly dividend of $0.12 per common share, payable on September 3, 2026, to shareholders of record as of August 20, 2026.