Q3 results were significantly better than Q2 results thanks to lower log prices. In its financial report, Mercer specifically mentions the increased supply of beetle-damaged wood in Germany.
For the first time, the financial report also mentions details of Mercer’s most recent acquisitions, in particular details about HIT Torgau: "Since 2021, we have invested approximately US-$396.6 million in the expansion of our solid wood business." In addition to the production facility in Torgau, this also includes the CLT plant in Spokane and the recently acquired solid wood production sites in Arkansas and Canada.
Higher sales due to new production sites
In Q3 2023, sales generated in the Solid Wood segment increased by around 61% to US-$119.5 million, from $74.3 million in the same quarter of 2022. This is primarily the result of the inclusion of Torgau in the segment and the ramp-up of the solid wood business, which was partially offset by lower lumber and energy sales.
Energy wood and sawmill by-product sales decreased by approximately 40%, from US-$12.8 million in Q3 2022 to US-$7.7 million in the same quarter of 2023, primarily due to lower sales realizations.
In Q3 2023, lumber production decreased slightly to 94.4 MMfbm (223,000 m³), from 97.1 MMfbm (229,000 m³) in the same quarter of 2022, as a result of maintenance downtime and the overall weak lumber market, partially offset by the inclusion of Torgau.
Lumber sales grew by around 28%, amounting to 114.7 MMfbm (271,000 m³) in Q3 2023, compared to 89.8 MMfbm (212,000 m³) in the same quarter of 2022.
Average lumber sales revenue fell by 27% to US-$443/Mbft (€270/m³, actual size) in Q3 2023, compared to approximately US-$605/1,000 bft (€369/m³, actual size) in Q3 2022 due to lower demand on both the US and European markets.
Mercer International Inc. is a global forest products company with operations in Germany, the US and Canada and a consolidated annual production capacity of 2.3 million t of pulp, 2.27 million m³ of lumber, 210,000 m³ of cross-laminated timber, 45,000 m³ of glulam, 17 million pallets and 230,000 t of biofuels.
