NEW YORK (News release) -- Mercer International Inc. reported first quarter 2025 Operating EBITDA of $47.1 million, a decrease from $63.6 million in the same quarter of 2024 and $99.2 million in the fourth quarter of 2024.

In the first quarter of 2025, net loss was $22.3 million ($0.33 per share) compared to $16.7 million ($0.25 per share) in the first quarter of 2024 and net income of $16.7 million ($0.25 per share) in the fourth quarter of 2024.

Mr. Juan Carlos Bueno, Chief Executive Officer, stated: "There was continued strength in pulp markets and an improving lumber pricing environment in the first quarter of 2025. However, our operating results in the quarter were negatively impacted by annual planned maintenance downtime at our Celgar mill and the impact of the weaker dollar against the euro.

We continue to monitor ongoing developments relating to U.S. and international trade policies, including tariffs, countermeasures and countervailing duties. To date, our costs and revenues have not been materially impacted by these developments. However, we recognize the potential for indirect impacts of a weaker global economy on both demand and pricing for our products and the fiber supply of our mills. In addition, the scale of any trade conflict may cause foreign exchange rate fluctuations, which would impact our operating results. The market uncertainty resulting from these developments has created some disturbances and volatility in cross border demand volumes. We continue to take steps seeking to mitigate our exposure to such tariffs and countermeasures and to take advantage of related opportunities that may arise as a result of our geographic diversity. However, it remains difficult to predict the potential impacts on our businesses as these developments are ongoing.

In this uncertain environment and to build resiliency through the economic cycle, we continue to implement cost reduction initiatives and operational efficiency measures targeting approximately $100 million in savings by the end of 2026, compared to 2024. In addition, in 2025, we are targeting a reduction of inventories of $20 million and have further reduced our expected capital expenditures for the year by $20 million by focusing on maintenance and accretive projects that are expected to enhance operational reliability and value across our business.

In the first quarter of 2025, third-party softwood pulp list prices increased from the fourth quarter of 2024 due to stable demand and continued global softwood supply constraints. Hardwood pulp prices in China also improved from floor levels as the maintenance season commenced in Latin America. As we move into the second quarter of 2025, we currently expect pulp prices to remain strong in Europe and North America. In China, we currently expect lower pulp prices, particularly for hardwood, as a result of weakened demand due to the current economic environment.

We saw increased lumber sales realizations in both the U.S. and Europe during the first quarter of 2025 as a result of reduced supply and steady demand. In the second quarter of 2025, we currently expect lumber prices to modestly decrease in the U.S. as a result of the impact of the current economic environment on customer demand. In Europe, we currently expect lumber prices to slightly increase in the second quarter due to higher per unit fiber costs.

Overall, per unit fiber costs for our pulp mills were relatively steady in the first quarter of 2025. For our sawmills, per unit fiber costs increased in the first quarter of 2025 due to strong demand. We completed a wood room upgrade at our Celgar mill during the quarter. The project was designed to reduce our dependence on sawmill residuals and lower our per unit fiber costs. In the second quarter of 2025, we currently expect per unit fiber costs for our German operations to be higher due to strong demand and reduced supply and for our Canadian pulp mills to be relatively stable.

Production volumes were impacted by 22 days (29,700 ADMTs) of planned annual maintenance downtime at our Celgar Mill in the first quarter of 2025, with an additional five days in April due to slower than planned start up. We are currently planning for a total of 21 days of planned maintenance downtime at our pulp mills in the second quarter of 2025.

In our solid wood segment, our mass timber business continued to make progress on various projects. Despite the ongoing impacts of the elevated interest rate on sectoral demand, we are starting to see embedded demand translate into a gradual increase in orders with planned start dates towards late 2025 and into 2026."

Mr. Bueno concluded: "The positive market momentum continued into the second quarter of 2025. However, we are beginning to see the uncertain climate affecting customer buying patterns and negatively impacting pricing in some of our markets. We remain steadfast in managing our costs and liquidity prudently and maintain our focus on debt reduction."

Total revenues for the first quarter of 2025 decreased by approximately 8% to $507.0 million from $553.4 million in the same quarter of 2024 primarily due to lower pulp sales volumes partially offset by higher pulp and lumber sales realizations.

Costs and expenses in the first quarter of 2025 decreased by approximately 10% to $500.2 million from $553.9 million in the same quarter of 2024 primarily as a result of lower pulp sales volumes and the positive impact of a stronger dollar on our Canadian dollar and euro denominated costs and expenses partially offset by higher planned maintenance downtime at our Celgar mill and higher per unit fiber costs. In the first quarter of 2024, costs and expenses included a non-cash loss of $23.6 million recognized in connection with the dissolution of the Cariboo Pulp and Paper ("CPP") joint venture.

In the first quarter of 2025, Operating EBITDA decreased to $47.1 million from $63.6 million in the same quarter of 2024 primarily as a result of higher planned maintenance downtime and higher per unit fiber costs partially offset by higher pulp and lumber sales realizations and the positive impact of a stronger dollar on our Canadian dollar and euro denominated costs and expenses.