Cascades Inc
TSX:CAS
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Cascades Inc
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Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cascades Third Quarter 2019 Financial Results Conference Call. [Operator Instructions]I will now turn the call over to Jennifer Aitken, Director of Investor Relations for Cascades. Ms. Aitken, you may begin your conference.
Thank you, operator. Good morning, everyone, and thank you for joining our third quarter 2019 financial results conference call. We will begin with an overview of our operational and financial results, followed by some concluding remarks, after which we will begin the question period.The speakers on today's call will be Mario Plourde, President and CEO; and Allan Hog, CFO. Also joining us on today's call are the presidents of Cascade's business segments, namely, Charles Malo, President and COO of the Containerboard Packaging Group; Luc Langevin, President and COO of the Specialty Products Group; and Jean-David Tardif, President and COO of the Tissue Papers Group. They will all be available for the question-and-answer period at the end of the call.Before I turn the call over to my colleagues, I would like to highlight that Reno de Medici's interim report released earlier this week can be viewed on Reno's website.I would also note that certain statements made during this call will discuss historical and forward-looking matters. The accuracy of these statements is subject to risk factors that can have a material impact on actual results. These risks are listed in our public filings. These statements, the investor presentation and the press release also include data that are not measures of performance under IFRS. Please refer to our accompanying Q3 2019 investor presentation for details.This presentation, along with our third quarter press release can be found in the Investors section of our website. If you have any questions, please feel free to call us after the session.I will now turn the call over to our CEO, Mario.
Thank you, Jennifer, and good morning, everyone. We are pleased with our overall operational performance and financial results in the third quarter.We generated another quarter of solid adjusted EBITDA that reflected good execution in all 4 of our business segments.Our Tissue segment posted stronger results due to the successes we are generating from our turnaround initiative, while results in Containerboard and European Boxboard continued to be solid, notwithstanding some market demand headwinds and a slight pricing erosion.Net earnings for the quarter were $70 million or $0.74 per share including the $52 million onetime gain to reflect the low purchase price of the Orchid asset relative to their fair value. This compared to $0.33 in the previous quarter and $0.38 last year.On an adjusted basis, we generated $0.30 per share in the third quarter. This compares to the earnings per share of $0.28 in the second quarter and $0.40 per share in the third quarter of 2018.Adjusted EBITDA of $161 million increased 18% over last year and 3% when compared to the second quarter.Our adjusted EBITDA margin reached 12.7% in Q3.In addition to our operational initiative, results were also favorably impacted by lower raw material cost. The average index price for OCC brown paper grades during the quarter was down 51% year-over-year and 18% compared to Q2.The average Q3 price for white recycled paper grades, which we mainly use in our tissue activity, decreased by 47% compared to prior year levels and 24% from Q2.On the virgin pulp side, hardwood and softwood pulp prices decreased both sequentially and year-over-year.As highlighted on Slide 6 in our presentation, the prices of all these materials continue their downward trends, which is positive for our outlook. OCC pricing has remained relatively low over recent months.I will now briefly discuss the third quarter performance for each of our business segments, which are highlighted on Page 8 through 13 of the presentation.The Containerboard segment generated third quarter adjusted EBITDA of $118 million, which is a 4% increase sequentially and a 1% increase year-over-year.During the quarter, we had unplanned maintenance downtime at the Greenpac mill, which we estimate negatively impacted EBITDA by $3 million.Despite this, and despite a slightly less favorable overall industry environment, margin remained solid at 24.9% in the quarter. This compare with margins of 24.5% in Q2 and 24.7% last year.We are pleased with our sequential performance, which was largely driven by higher volume and lower transportation and operating costs. These benefits were partially offset by the lower average selling price and the impact of a less favorable exchange rate during the period.Our Q3 operating rate was 94%, up 3% sequentially, with paper shipments increasing 9,000 tons, reflecting seasonal trends. Including sales to associated companies, our integration rate decreased very slightly to 71% in the third quarter from 72% in Q2.Shipment of converted product increased 3% sequentially in millions of square feet. These outperformed the overall 1% increase for both the Canadian and the U.S. market.In the third quarter, we took approximately 11,000 tons of maintenance downtime and 3,000 tons of market-related downtime.On Slide 8, we have updated our downtime plan for 2019, which we expect to take approximately 16,000 tons of maintenance downtime in the fourth quarter.Moving now to the Tissue Paper. Results continued to show positive momentum and highlight the growing benefit from ongoing operational and productivity improvement initiatives. In addition, lower raw material price, more stable transportation costs and previously announced price increase, supported operational performance sequentially. More significantly, Q3 results highlight the growing benefits from ongoing productivity improvement initiatives.Total shipment decreased by 2% year-over-year, excluding Orchids. This reflects a 29% decrease in external shipments of parent roll year-over-year due to the higher integration and the closure of our 2 paper machine in Toronto, which removed 44,000 ton annually. These factors were partially offset by a 6% increase in shipments of converted products due to the increased demand of our target market segment and long-term contract with key strategic customers.As we have mentioned in the past, we continue to use additional subcontracting to supply our volume requirements, which has a negative impact on margin and profitability. The capital investment and benefit -- business plan we are executing are focused on addressing this situation. The addition of Orchids facility in our platform will optimize our logistic network and geographical positioning and reduce subcontracting costs in the future.Our average selling price increased 8% year-over-year in the third quarter. This reflects a combination of price increase announced in the second half of 2018, a favorable sales mix and the depreciation of the Canadian dollar. On a sequential basis, the average selling price decreased by 1%, largely due to the appreciation of the Canadian dollar.As we have previously mentioned, a price increase of up to 8% in the away-from-home segment across North America was announced effective June 1. This increase benefited third quarter results.The European Boxboard operation generated solid third quarter results. Sales increased 22% compared to last year due to the acquisition of Barcelona Cartonboard at the end of 2018 and better volume on the same plant basis. This was offset by a less favorable average selling price and 4% appreciation of the Canadian dollar.On a year-over-year basis, the average Q3 selling price decreased in both euro and Canadian dollar. This reflect the stronger Canadian dollar, the higher proportion of recycled products sold following the acquisition of Barcelona Cartonboard, price decrease due to market softness and a less favorable geographical sales mix.The average Q3 selling price of recycled boxboard decreased by EUR 13 or 3% year-over-year while the average selling price of virgin boxboard increased by EUR 14 or 2%.On a sequential basis, the 5% decrease in sales reflects the lower average selling price, a decrease in volume related to the usual seasonality in the quarter and a stronger Canadian dollar.Adjusted EBITDA decreased by $5 million or 17% from Q2 levels, primarily due to the usual Q3 seasonality and the higher costs related to the production downtime taken as a result. These were partially offset by lower raw material costs and a slightly higher energy credit in the current period.Year-over-year EBITDA increased by $6 million as the impact of lower average selling price on the same-plant basis was more than offset by the benefit from the acquisition of Barcelona and lower raw material costs.Third quarter sales in the Specialty Products were $176 million, down 9% from $193 million in Q2. This was largely due to the lower prices in the recovery subsegment, lower volume in Consumer Packaging and the closure of 1 of our Specialty mill late in the second quarter.Q3 EBITDA of $14 million was $1 million above Q2 levels. This reflects a sequential improvement in Industrial Packaging as a result of reduced operating costs.Conversely, Consumer Product generated lower results that were largely due to lower volumes in the flexible and moulded pulp subsegment.A fire at the Rockingham North Carolina moulded pulp plant in the mid-September resulted in an 8-week closure. This shutdown will have a slight impact on Q4 results as operations were started at the beginning of November.Our packaging activity generated an EBITDA margin of 13.8% in the quarter versus 11.1% in Q2, and 12.2% last year.The recovered paper market remains difficult with quarterly average selling price continuing to decline from Q2. Efforts to review our supply, collection and operating costs has helped to offset the impact of the sequential deteriorating spread.I will now pass the call to Allan, who will discuss the main highlights of our third quarter financial performance. Allan?
Yes. Thank you, Mario, and good morning, everyone. So I will begin with an overview of our key KPIs on Slide 15.Our third quarter shipments increased by 1.2% from Q2. This was driven by Containerboard and Tissue, where shipments increased by 4% sequentially in both cases, reflecting seasonal demand trends.Shipment levels marginally decreased in Boxboard Europe following the usual seasonal softness in the third quarter for these markets.Third quarter capacity utilization rate of 93% was stable sequentially and increased 2% compared to last year. On an LTM basis, working capital came in at 10.3% of sales, where return on assets stood at 11.3%.Moving now to sales, I've detailed on Slide 16 and 17. On a year-over-year basis, third quarter sales increased by $89 million or 8%. This reflects the contributions from recent business acquisitions in Tissue, Boxboard Europe and Specialty Products, in addition to improvements in pricing and sales mix in Tissue, stronger volumes in Containerboard and European Boxboard.While exchange rates were favorable for our North American operations, they were negative for our European results for a net negative impact on the quarter.Offsetting these benefits were lower volumes in Tissue and lower average selling price in Containerboard. As has been the case in recent quarters, recovery activities negatively impacted sales due to lower recycled material pricing.Sequentially, Q3 sales decreased moderately by $11 million or 1% as the benefits of higher seasonal volumes in Containerboard and Tissue were partly offset by less favorable pricing and mix in all segments, except Specialty Products. Lower volume in Boxboard Europe and Specialty products, lower sales from recovery activities and the unfavorable exchange rate were also offsetting factors.Moving now to operating income and adjusted EBITDA. As highlighted on Slide 18, Q3 adjusted EBITDA of $161 million increased $24 million from prior year level. Results benefited from a stronger performance on the Tissue segment and European Boxboard.Sequentially, Q3 adjusted EBITDA increased by $5 million, as shown on Slide 19. This was largely the result of stronger performances in Tissue Papers and Containerboard.Take note, once again, that the impact of IFRS 16 accounting for leases contributed $7 million to EBITDA in the quarter and $22 million in the first 9 months of 2019. Please refer to Slide 30 for supplemental information.Slide 20 and 21 illustrate the year-over-year and sequential volumes of our Q3 earnings per share and the reconciliation with the specific items that affected our quarterly results.As reported, earnings per share was $0.74 in the third quarter compared to reported EPS of $0.38 last year. Both periods included specific items.On an adjusted basis, EPS decreased by $0.10 compared to last year results. Higher operating costs were offset by higher depreciation and financing expenses. The change in depreciation expense reflects 2018 business acquisitions and capital projects booking operations and the adoption of IFRS 16 standard for leases.Financing expenses also increased due to IFRS 16 and also to the -- due to the fair value accretion of CDPQ's option in Greenpac, which is accounted for as a liability, as previously disclosed.Slide 22 and 23 illustrate the specific items recorded during the quarter. The items include a $52 million net gain on the acquisition of Orchids, following our preliminary purchase price allocation, and we also incurred $4 million of related transaction costs; a $2 million gain to the sale of a building and land in the Containerboard segment, and a $2 million loss following the sale of Specialty Products operation in France and closure of 1 North American facility in Q2; and also a $7 million unrealized loss on the fair value revaluation of an option in the Bear Island project.Third quarter adjusted cash flow from operation increased by $16 million year-over-year to $108 million. Adjusted free cash flow was significantly higher this year versus 2018 due to lower net CapEx paid in the period.Moving now to our net debt reconciliation as detailed on Slide 25. Our net debt increased by $216 million in the quarter, reflecting the Orchids acquisition. Before business acquisition and disposal, I would highlight that net debt decreased by $62 million in the quarter. So in mid-September, we completed the acquisition of Orchids for CAD 300 million. $14 million was previously paid in Q2, in addition to the assumption of debt for $7 million. In conjunction with this, at closing of the transaction, we sold the Mexican assets, which were part of the Orchids acquisition to Fabrica de Papel for a cash consideration of $19 million, of which $14 million was received at closing.Also during the quarter, we sold the Specialty Products Group interest in 2 French operations for cash consideration of $10 million and net debt was also transferred to the acquirer for $5 million.Our net debt leverage ratio stood at 3.7x at the end of the quarter compared to 3.4x at the end of Q2 and 3.5x at the end of 2018. Again, if we exclude transaction that occurred towards the end of the quarter, this ratio would have been 3.2x.This along with other financial ratios and information about maturities are detailed on Slide 26.On Slide 27, we provide details about our capital investments year-to-date on a segment-by-segment basis.Our annual CapEx spend for 2019 will be less than initially disclosed and are expected to finish the year at roughly $300 million.I will now pass the call back to Mario, who will wrap up the call with a brief conclusion before we begin the question period.
Thank you, Allan. In summary, we are pleased with our third quarter performance. All of our business segments continue to generate solid results that met expectations. In addition, we made an important strategic move by completing the acquisition of Orchids Paper Products issue activities in mid-September. This acquisition is highly synergistic and important part of our U.S. tissue modernization effort and will strengthen both the geographic and operational positioning of our tissue platform. The transaction creates value of Cascade with an expected annual EBITDA contribution of $25 million to $30 million in 2020, increasing to approximately $45 million in 2021.Slide 29 to 31 provides an update on the integration of Orchid, which is going according to plan.We can find on the near-term outlook for our business segments in Slide 32 of our presentation.Overall, we expect fourth quarter performance from our North American operations to reflect the softer seasonal demand inherent in the period and a less favorable exchange rate compared to our recent Q3 performance.Due to the continuing strength of the Containerboard business and the positive momentum in Tissue, we are well positioned to generate record annual adjusted EBITDA this year. We have already attained 92% of our full year 2018 results after only 9 months.We remain focused on improving operational efficiency and productivity, successfully executing our capital investment plan and finalizing details for our Bear Island project.We will now be happy to answer your questions. Operator?
[Operator Instructions] Your first question comes from the line of Adam Josephson with KeyBanc.
Mario, you commented at the very end of your prepared remarks that you're still finalizing the details of the Bear Island conversion. You had the unrealized loss in the fair value revaluation. You reduced your CapEx guidance, obviously, mostly to remove the Bear Island-related spend that you were previously including in that CapEx guidance. Can you just update us on your thought process with respect to that project?
Sure. As we highlighted in Q2, the Bear Island project for us is an important project, considering the market right now and knowing that there's a lot of capacity coming on stream probably in 2021. Obviously, we want to make sure that this project is a good project for us. So we are looking to find uptake partners and also financial partners to support this project. So it takes a little more time. The technical part of the plant is quite well advanced. So -- but we still are on track. And by Q4, at the end of the year, we'll be able to give you a firm update on where we stand with Bear Island.
I appreciate it. And just one follow-up on that. You mentioned all the capacity coming on. Has that changed your thought process with respect to the long-term return potential of this project?
No. Not at all. We think that the Bear Island project is a solid project for Cascade, and it will help us to position ourselves for the future.
I appreciate your clarifying that, Mario. And then Mario or Charles, in terms of your sequential guidance on Containerboard, you talked about the potential for sequentially lower volume and price, with the sequential volume decline, seemingly above and beyond the lower seasonality in Q4. Can you just go into a little more detail on that, if you don't mind?
Yes. I'm just going to start without giving too much detail on the pricing, but the compounded impact of the index movement will have an impact in Q4. And this is what we're reflecting regarding the impact on the pricing. In regards to the volume, as you know, in the Q4 for us, there's always a lowering volume on our business. And that's what we're reflecting here. And we're being conservative also. We're cautiously conservative on the volume aspect for -- from now till the end of the year.
And cautious for what reason exactly, Charles?
Well, the business is still -- actually, the business is still good. It's still what we see both in Canada and also in U.S. for us, specifically also with the additional -- addition of our Piscataway facility that is going very well and it's contributing. But the -- just regarding the economy, and so we want to be cautious in -- when we look forward.
I appreciate it. And just one last one on the seasonality issue. E-commerce, at least in the U.S. market, has largely eliminated the seasonality. Obviously, in years past, November and December used to be quite light from a demand perspective. And that's changed in recent years because of the growth in e-commerce, such that if you look at the industry data, fourth quarter shipments are really not that much different than the other 3. Can you talk about what impact you see e-commerce is having had on that seasonality issue? And what your expectations are for e-commerce, specifically this fourth quarter?
Yes. So you're right about the e-commerce, that it flattened the seasonality. In our product mix, we do have -- when compared to the overall, we have a bit more specialty in our mix, whether it's produce or other cells that we have in our mix that can maybe influence a bit more to seasonality in our group. But the point of the e-commerce really flattened the volume quarter-after-quarter this quarter, and we're seeing this also in our group.
Your next question comes from the line of Hamir Patel with CIBC Capital Markets.
Charles, can you give us a sense as to how your box shipments fared in the month of October?
Yes. The month of October, we are seeing good volume in our -- most of our regions. And again, I just want to mention that in addition to this, we have our new Piscataway facility that is really having a positive impact on the overall of our business.
And just a question for Jean-David. I appreciate the 2020 EBITDA guidance for Orchids. How should we think about the ramp-up curve to deliver the USD 25 million to USD 30 million next year?
We're confident right now about, especially Barnwell modification that we're going to do so we see this as more towards the second half of 2020. But it's still on the right track, I can say.
The other piece of it's all related to logistics and the transfer of subcontracting. So that will start really shortly. So that should ramp up quite early, in the first half of the year.
Yes, we already started to bring some outsourcing back into the Orchids facility and also the plant closure that we announced last week or 2 weeks ago, will bring significant volume also to the Orchids facility in the first half of the year also.
And reduce fixed cost at the same time, so -- and logistics cost.
Yes. After the second quarter.
Okay. Great. That's helpful. And Allan, any indication yet of what CapEx would be in 2020, both if you went ahead with Bear Island and if you didn't?
So far, Allan has mentioned, around $300 million. If we -- we would -- say we go ahead with Bear Island, we'd probably end up at $330 million, $335 million, something like this. But it all depends on the decision of Bear Island in 2020 or either 2019.
Your next question comes from the line of Sean Steuart with TD Securities.
Just one question. Wanted your broader thinking on recycled fiber costs. It feels like we're going to be in a lower-cost environment for longer. And I'm wondering how that informs your long-term capital deployment decisions. What type of long-term OCC price are you assuming for your long-term plans? And how does that effect, not just Bear Island thinking, but broader thoughts going forward on capital deployment?
Yes. Well, as you know, Sean, we always were recycled; 80% of what we produce is recycled. So for us, it hasn't changed our long-term view. We will remain mainly focused on recycled. Obviously, today, it benefits our business and all of the business segments. So but we might be a little more precise in what we will recycle and the quality of the material will recycle. So as we're doing today, we're reviewing all the networks of recovery and recycling activity and just making sure that they support the business. They're there to complement what we do with the paper mills. And so yes, we will keep on expanding and using recycled material in the future.
Your next question comes from the line of Paul Quinn with RBC.
Just a follow-up question on timing of Bear Island. If you made that decision by the end of the year, is that coming up in 2022 now?
Yes. Yes, Paul.
Okay. That's easy.
No. No, but the question was short, the answer was short. Yes. Will it come in 2022? Yes.
Okay. Maybe I could follow up, first half or back half?
It takes 24 months to go just because of either the timing of the equipment coming in and to do all the modification, the deployment and things like that, and that's what we're saying that...
Let's say, if we place an order by year-end, probably first quarter of 2022 will be the start.
Okay. Okay. That's helpful. And then just overall, I mean, there's a notion out there that e-commerce got started in Canada a little bit later than in the U.S. and you've got the majority of your Containerboard assets in Canada. Do you see that as a tailwind for e-commerce across Canada for your Containerboard Group?
The -- I mean we do have both sides of the business. First of all, are converting mainly in Canada, but we also sell to outside independent and customers that are also using the e-commerce. So for us, we see the benefits on the overall of our group.
Okay. That's helpful. And then just lastly, just on the unplanned downtime at Greenpac? What happened? And is it fixed?
Yes, it's an issue -- a onetime issue that we had, nonpredictable on our side. But yes, it's fixed. And we should not see something like that happen in the future.
Okay. And then just, I guess, lastly, just on Tissue. Besides the integration of Orchids, what's the priority within Tissue?
Definitely, we have a major turnaround plan across all the facilities. So on the West Coast, as you know, we've lost a significant amount of money there last year. So we're putting a lot of emphasis. So it's going really well there. But also, there's also the subcontracting that we're bringing back internally and other initiatives in fixed cost reduction, profitability improvement, et cetera, to the organization.
[Operator Instructions] Your next question comes from the line of Keith Howlett with Desjardins.
I had some questions on the Orchids plant. You mentioned that you're converting it from QRT to conventional. I was just wondering what -- why that was and what that's to achieve?
Well right now, we have a lot of volume in conventional paper, a lot of outsourcing, as I said earlier. So we want to fill this mill. We made really significant improvement on the QRT technology only after a few months. So we want to run the machine and the mill at full capacity short term. And we'll take time to develop the QRT technology and the product, improve the product over time, but it was important for us to get to 36,000 tons, and the 5 million cases capacity of that mill. So that's why we're putting conventional paper into this short term, but we will be able to grow the QRT business later on.
And what is the -- is there a future ongoing relationship with Fabrica? Or is that end with the sale of assets to them?
No. We maintain -- we renegotiate the supply agreement with them. So the volume is the same as it was before. We just renegotiated the terms of it, and that's why they buy back the asset. But the volume in tons and cases is the same as it was.
And I was just wondering on transportation costs. I think it was mentioned that there have been an improvement or -- in transportation in Q3 in Tissue. Does that relate to your internal restructuring of facilities? Or is the market improved for transport services?
It's mainly due to improvement in our system by moving less cases between our plants and having better logistics to support our customers from the right mill, mainly. Yes.
And then I just had a question on the European roll pack business. I think, as I understand that you also operate a joint venture in that similar business in North America. Is there any change of view on the North American business?
No. No. This is Luc. Sorry, Keith. No, we have no -- doesn't impact at all our vision with -- for the North American assets.
And then just finally, on the recovery business. In terms of the business model going forward, are you sort of trying to evolve that to a service business? Or is it still sort of a margin business? Or what's the outlook there?
Yes. With this, the reflection in the vision for the recovery business was actually revised 4 years ago. And it was already our intention to focus more this business towards supplying our mills and growing this business to support the growth -- the global growth plan of Cascade. So we're just going to continue what we have already initiated over the last few years. So definitely, the future investment if they are in this business will be there to support the growth of Cascade.
I see. So is that business sort of stable now and improving or how is it?
Yes. We -- as -- I think as Mario mentioned, obviously, we hope -- we believe that with the current price of OCC, we're getting close to a bottom price. So far, we have been involved -- able to offset the sequential decrease from last quarter. So yes, the situation is improving. As I said, I guess, the last quarter, it involves for us to renegotiate all the agreement we have with the suppliers and review all the routing we have. So we have obviously to adapt the business model to the new cost structure. It's a significant change from the above $100 we had last year to $30 now. But the moves and the decision are already in place. And obviously, we have some long-term agreement that we have to respect. But every time we have an opportunity to renegotiate, we do.
Your next question comes from the line of Zachary Evershed with National Bank Financial.
Congrats on the quarter. I was hoping you could walk me through in terms of thought process on the top line and margins, the whole process, the shutdown of the 2 facilities in March and then the rebalancing to the rest of the Tissue network. How quickly that will go? And what we can see on the financial statements from that?
In Tissue particularly?
Yes, please.
You mean in 2020 or...?
Yes, the shutdown in the Kingman and Waterford plants in 2020.
Okay. So we announced the shutdown for end of March, so it's going to take time to integrate all the volume in the other mill, but right now, we see probably $10 million fixed cost reduction by shutting down these 2 facilities. And the volume, we have the open capacity into the Orchids platform, and it's also related to the other investment that we announced bit last year in Wagram, South -- North Carolina. So both away-from-home and the customer product market are benefiting from -- on those recent investments.
So Zachary, combined with the Orchids platform, as we said, our target is to come back to 10%, 12% EBITDA margin as soon as we can. So that's the plan, and these are steps that we're taking to move towards that as soon as we can next year and the year after.
That's great. And just in terms of the thinking on that because the capacity is available, it could be -- the network could be rebalanced the next day, essentially. There's not going to be a long time to ramp up this moved capacity.
No. We're ramping up Orchids volume a little bit, but all in all, there is no major ramp-up.
Understood. And then just one last one for me. I'm curious to get your thoughts on China's impact on recycled fiber and how you see that evolving over the coming years?
Yes. This is Luc talking. Last a year or 2 ago, it was announced by China, by -- that's by 2020, they would be pretty much out of the recycled market. And what we hear is that they stick to that plan. And we -- not only we see that the Chinese market is going down, but we see also the other markets are getting more difficult, the other export markets more difficult. So it's very quiet now for exports, and that's probably why we've seen an additional reduction in the OCC earlier this week. There's plenty of material in the market.
Your next question comes from the line of Keith Howlett with Desjardins.
I wondered if you could just update us on the St. Helens and Scappoose manufacturing and converting operations.
Yes. And also, we made a really good improvement in those 2 facilities. So the St. Helens facility is making good profit these days. The 2 together are now breakeven since 1 month, 2 months almost. So we're continuing our improvement plan down there. Yes.
There are no further questions at this time. Mr. Plourde, please continue.
Thank you, everyone, for being on the call today. And looking forward to talk to you for our Q4 results. Have a good day. Thank you.
[Foreign Language] Thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect.