Cascades 2Q 2006 net earnings up to $33 million

Aug 02, 2006. /Lesprom Network/.  Cascades Inc. reports net earnings of $33 million ($0.41 per share) for the quarter ended June 30, 2006 or $16 million ($0.20 per share) excluding specific items. This compares with net earnings of $4 million ($0.05 per share) for the same period in 2005.

In million Canadian dollars                                                         

Taking into account the reclassification in first quarter 2006 of the Thunder Bay coated paper mill as a discontinued operation, sales decreased by 2% during the second quarter of 2006 amounting to $841 million compared to $862 million in 2005. Operating income from continuing operations amounted to $44 million which compares to the $33 million achieved for the same period last year. Generally speaking, higher volumes, selling prices and management's emphasis on non-performing assets combined with a reduction in energy costs and depreciation expenses more than offset higher prices for fibre. The $33 million of net earnings realized during the second quarter includes amongst others, a $12 million after-tax unrealized foreign exchange gain on long-term debt and a $5 million recovery of future taxes resulting from the recently announced progressive reduction of Canadian corporation income taxes.

Commenting on the quarterly results, Mr. Alain Lemaire, president and chief executive officer stated: "We are pleased with our recent results as they demonstrate our ability to adapt to a new business environment. These new realities may have led to difficult decisions in recent months, however they also comforted us with our strategies. With the help of our employees we intend to continue in this direction in order to further ensure the company's financial health and stability."

Mr. Alain Lemaire added: "We anticipate business conditions will remain challenging for the remainder of the year given the potential softening of demand coming from the United-States, the volatility of the Canadian dollar and energy prices in addition to the recently observed fiber price increases. We will continue to be very proactive managing our costs, focusing on our non-performing assets and integrating recent acquisitions. Furthermore, we also intend to continue exploring selective acquisition opportunities in our key business segments as well as the potential divestiture of a limited number of non-core assets."

Founded in 1964, Cascades produces, transforms and markets packaging products, tissue paper and fine papers, composed mainly of recycled fibres. Cascades employs nearly 14 300 men and women who work in some 120 modern and flexible production units located in North America, in Europe and in Asia. Cascades' management philosophy, its more than 40 years of experience in recycling, its continued efforts in research and development are strengths which enable the company to create new products for its customers and thus offer superior performance to its shareholders. The Cascades shares trade on the Toronto stock exchange.