Mercer International Reports $22.3 Million Net Loss in Q1 2025

Mercer International Inc. reported a net loss of $22.3 million, or $0.33 per share, for the first quarter of 2025, compared to a net loss of $16.7 million, or $0.25 per share, in the same period of 2024. Total revenues decreased by approximately 8% to $507.0 million from $553.4 million year-over-year, primarily driven by lower pulp sales volumes, although this was partially offset by higher sales realizations for both pulp and lumber. The company's pulp segment generated revenues of $381.1 million, down from $432.4 million, while the solid wood segment saw a slight increase in revenues to $122.7 million from $119.0 million.

The company's operating income for the first quarter of 2025 was $6.7 million, a significant improvement from an operating loss of $0.4 million in the same quarter of 2024. This increase was attributed to higher pulp and lumber sales realizations and a favorable foreign exchange impact, which provided approximately $9.7 million in operating income. However, the pulp segment's operating EBITDA decreased by 27% to $49.9 million, primarily due to planned maintenance downtime and higher per unit fiber costs. The solid wood segment reported a negative operating EBITDA of $0.3 million, an improvement from a loss of $0.9 million in the prior year.

In terms of operational metrics, Mercer International's pulp production decreased by 15% to 370.4 thousand air-dried metric tonnes (ADMTs) from 453.2 ADMTs in the previous year, largely due to maintenance downtime. The company also reported a decrease in total pulp sales volumes, which fell by 16% to 477.9 ADMTs. Conversely, lumber production remained stable at 128.0 million board feet, with sales volumes increasing by 8% to 130.9 million board feet, reflecting improved demand in both U.S. and European markets.

Mercer International's cash flow from operating activities improved significantly, with a net cash outflow of $3.0 million for the first quarter of 2025, compared to $29.2 million in the same quarter of 2024. The company reported cash and cash equivalents of $181.5 million as of March 31, 2025, with total assets increasing to $2.34 billion from $2.26 billion at the end of 2024. The company also noted that it expects to maintain adequate liquidity to finance its operations and capital requirements over the next 12 months, despite the cyclical nature of the industry and ongoing market uncertainties.