Aug 09, 2012. /Lesprom Network/. Cascades Inc. announces its financial results for the three-month period ended June 30, 2012. In comparison with the same period last year, 2Q sales decreased by 5% to $944 million as of result of lower volumes, lower average selling prices and the net impact of business divestitures and closures over acquisitions that more than offset a more favourable exchange rate. The above-mentioned factors combined with lower raw material costs resulted in operating income, excluding specific items, amounting to $37 million compared to $15 million in 2Q 2011. Net earnings excluding specific items amounted to $7 million in the 2Q 2012 compared to a net loss of $9 million for the same period of last year. Including specific items, net earnings amounted to $7 million compared to $122 million for the same quarter in 2011, period at which a gain related to the divestiture of Dopaco was recorded. In comparison to the previous quarter, sales increased by 6% mostly due the impact of higher volumes. Acquisitions and a favourable foreign exchange rate also contributed to counterbalance the impact of lower selling prices due to a less favourable product mix. Excluding specific items, operating income increased by $11 million to reach $37 million while net earnings improved by 75% reaching $7 million primarily due to volume growth that more than offset an increase in raw material prices. Net earnings excluding specific items for the quarter were also reduced by a higher tax rate in Europe and by a lower contribution of earnings from our associates and joint ventures representing approximately $4 million. Net debt increased by $61 million to $1,585 million due to an unfavorable exchange rate and as a result of capital investments including the acquisition of Bird Packaging and the completion of the funding of our investment in the Greenpac project. The Board of Directors of Cascades declared a quarterly dividend of $0.04 per share to be paid September 13, 2012 to shareholders of record at the close of business on August 31, 2012. Alain Lemaire, President and CEO, had the following comments on the 2Q results and near-term outlook:"As a result of higher volumes, lower energy costs and a weaker Canadian dollar, our profitability improved again sequentially during the 2Q 2012. Most importantly, these results highlight that our strategy focused on our two core sectors, Tissue Papers and Packaging, is working to our advantage in a soft economic environment. Our Tissue Papers Group posted good results and our Specialty Products Group performed according to expectations. These two sectors accounted for most of the gain. As well, we are working to resolve operational issues in our Containerboard manufacturing operations to bring them back to expected productivity levels. This will be particularly important as the state of the containerboard market is finally allowing for more favorable conditions for producers. In Europe, the economic situation had a negative impact on the demand for our products in the first semester but order flows and backlogs indicate a return to more acceptable levels. Hence, we are confident despite the economic environment in North America which continues to be uncertain. White grades recycled paper prices have increased recently but current availability leads us to believe that prices will be stable in the short term. As for brown grades, supply is good and prices have recently decreased which is positive. Usual seasonality associated with the third quarter, the impact of our recent strategic initiatives and expected improvements in our productivity rate should contribute to improved financial performance. The European economic environment remains challenging and we continue to focus on the project we started a few years ago to equip ourselves with a more competitive operational platform. Irrespective of the economic environment, we are committed to continue to improve our financial and operational performance." Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres.