Mercer International Inc (MERC) 2023 Q3 法說會逐字稿

Good morning, and welcome to Mercer International's Third Quarter 2023 Earnings Conference Call. On the call today is Juan Carlos Bueno, Mercer's President and Chief Executive Officer; and Richard Short, Mercer's Chief Financial Officer and Secretary.

早安，歡迎參加美世國際 2023 年第三季財報電話會議。今天參加電話會議的是美世總裁兼執行長胡安·卡洛斯·布埃諾 (Juan Carlos Bueno)；以及美世財務長兼秘書理查‧肖特 (Richard Short)。

I will now hand the call over to Richard.

我現在將電話轉交給理查。

Good morning, everyone. Thanks for joining us today. I will begin by touching on the financial and operating highlights of the third quarter before turning the call over to Juan Carlos to provide further color into the markets, our operations and our strategic initiatives. Also, for those of you that have joined the call by telephone, there's a presentation material that we have attached in the Investors section of our website.

大家，早安。感謝您今天加入我們。我將首先談談第三季的財務和營運亮點，然後將電話轉給胡安·卡洛斯，以進一步介紹市場、我們的營運和我們的策略舉措。此外，對於那些透過電話參加電話會議的人，我們在我們網站的投資者部分附上了一份簡報資料。

But before turning to our results, I would like to remind you that we will be making forward-looking statements in this morning's conference call. According to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, I'd like to call your attention to the risks related to these statements, which are more fully described in our press release and in the company's filings with the Securities and Exchange Commission.

但在討論我們的結果之前，我想提醒您，我們將在今天早上的電話會議中發表前瞻性聲明。根據1995 年《私人證券訴訟改革法案》的安全港條款，我想提請您注意與這些聲明相關的風險，這些風險在我們的新聞稿以及公司向證券和證券交易委員會提交的文件中進行了更全面的描述。外匯委員會。

This quarter, our EBITDA was $38 million. Composed of Q2's -- compared to Q2's negative EBITDA of $69 million, this significant improvement over the prior quarter was due to lower fiber and other production costs, inventory impairment reversal and fewer days of scheduled annual maintenance downtime, partially offset by lower pulp sales realizations.

本季度，我們的 EBITDA 為 3,800 萬美元。由第二季度組成——與第二季度6900 萬美元的負EBITDA 相比，上一季的顯著改善是由於纖維和其他生產成本降低、庫存減值逆轉以及計劃年度維護停機天數減少，部分被紙漿銷售實現的減少所抵消。

Our pulp segment contributed quarterly EBITDA of $49 million and our solid wood segment EBITDA was negative $7 million. You can find additional segment disclosures in our Form 10-Q, which can be found on our website and that of the SEC.

我們的紙漿部門季度 EBITDA 貢獻了 4,900 萬美元，而我們的實木部門 EBITDA 為負 700 萬美元。您可以在我們的 10-Q 表格中找到其他分部披露信息，該表格可以在我們的網站和 SEC 的網站上找到。

In Q3, our pulp segment had significantly lower fiber costs in Q2. As a reminder, Q2 results included a $51 million inventory impairment, primarily for hardwood inventory. At the end of Q3, only about $9 million of this impairment remains against our closing inventory. Our solid wood segment also had lower per unit fiber costs in Q3 when compared to Q2, due to the availability of lower-cost beetle damaged wood in Germany. We currently expect beetle damaged wood to be available into 2024.

在第三季度，我們的紙漿部門的纖維成本在第二季度顯著降低。提醒一下，第二季業績包括 5,100 萬美元的庫存減值，主要針對硬木庫存。截至第三季末，我們的期末庫存只剩下約 900 萬美元的減損損失。與第二季相比，我們的實木部門在第三季的單位纖維成本也較低，因為德國有成本較低的甲蟲損壞的木材。目前，我們預計甲蟲損壞的木材將在 2024 年上市。

In Q3, both our NBSK and NBHK sales realizations decreased compared to Q2 as modestly higher prices in China, driven by low customer inventory levels, were more than offset by lower prices in Europe and North America due to weak paper demand. Late in the quarter, we started to see similar restocking efforts in both Europe and North America, which created modest upward pricing pressure.

第三季度，我們的 NBSK 和 NBHK 銷售實現量均較第二季度下降，原因是客戶庫存水準較低導致中國價格小幅上漲，但被歐洲和北美因紙張需求疲軟導致價格下跌所抵銷。本季末，我們開始在歐洲和北美看到類似的補貨行動，這造成了適度的價格上漲壓力。

In China, the Q3 average NBSK net price was $680 per tonne, up $12 relative to Q2. It is worth noting that pulp prices in China are up about $100 a tonne compared to the low point this year. European NBSK list prices averaged $1,160 per tonne in the current quarter, a decrease of $87 per tonne from Q2.

在中國，第三季NBSK平均淨價為每噸680美元，較第二季上漲12美元。值得注意的是，與今年低點相比，中國紙漿價格每噸上漲約100美元。本季歐洲 NBSK 平均標價為每噸 1,160 美元，比第二季每噸下降 87 美元。

The market price gap between NBSK and NBHK in China narrowed to about $150 per tonne in Q3 from $185 per tonne in Q2. In China, the Q3 average NBHK net price was $530 per tonne, up $47 compared to the average of Q2. The North American average Q3 list price was $1,023 per tonne, down $254 or about 20% from Q2.

中國NBSK和NBHK之間的市價差從第二季的每噸185美元縮小至第三季的每噸150美元左右。在中國，第三季NBHK平均淨價為每噸530美元，比第二季平均上漲47美元。北美第三季平均標價為每噸 1,023 美元，比第二季下降 254 美元，約 20%。

All our mills ran well this quarter. And we had less scheduled downtime in Q3 when compared to Q2. In Q3, we had a total of 39 days of downtime at our mills, which consisted of 13 days for planned maintenance and 26 days for a logistics-related curtailment, while in Q2, we had 60 days of downtime at our mills, which consisted of 25 days for planned maintenance and 35 days for market curtailment.

本季我們所有工廠都運作良好。與第二季相比，我們第三季的計劃停機時間更少。在第三季度，我們工廠總共停工 39 天，其中包括 13 天計畫維護和 26 天物流相關縮減，而在第二季度，我們工廠停工 60 天，其中包括計畫維護 25 天，市場限制 35 天。

The lower scheduled maintenance downtime positively impacted EBITDA by about $10 million in Q3 when compared to Q2. After adjusting for planned shuts and curtailments, pulp production was down approximately 12,000 tonnes from the second quarter. Total pulp sales volumes in the third quarter were about 487,000 tonnes, down about 9% from the second quarter due to the timing of sales.

與第二季相比，第三季計劃維護停機時間的減少對 EBITDA 產生了約 1,000 萬美元的正面影響。在計劃中的停產和減產進行調整後，紙漿產量較第二季減少約 12,000 噸。第三季紙漿總銷量約487,000噸，由於銷售時間原因，較第二季下降約9%。

For our solid wood segment, modest lumber pricing improvements in the U.S. market were offset by lower pricing in the Europe market. Despite the price increases in the U.S., overall lumber demand remains weak due to high interest rates.

對我們的實木部門來說，美國市場木材價格的小幅上漲被歐洲市場價格的下降所抵銷。儘管美國價格上漲，但由於高利率，整體木材需求仍然疲軟。

The Random Lengths U.S. benchmark for Western SPF #2 and better was $407 per thousand board feet at the end of Q3 compared to $380 at the end of Q2. Today, the benchmark is around $377. We are not anticipating significant improvements to lumber pricing in the near term due to high interest rates and the seasonal slowdown in construction activity.

第三季末，西方 SPF #2 及更高版本的隨機長度美國基準為每千板英尺 407 美元，而第二季末為每千板英尺 380 美元。今天，基準價格約為 377 美元。由於高利率和建築活動的季節性放緩，我們預計短期內木材定價不會有重大改善。

Lumber production was about 94 million board feet in the quarter, down almost 23% from Q2 due to scheduled annual maintenance work completed in Q3. Lumber sales volumes were approximately 115 million board feet, down 14% from the prior quarter.

由於第三季完成的年度維護工作，本季木材產量約為 9,400 萬板英尺，較第二季下降近 23%。木材銷量約為 1.15 億板英尺，比上一季下降 14%。

Electricity sales totaled 254 gigawatt hours in the quarter, which is modestly up from Q2 due to fewer days of scheduled downtime in Q3. Pricing in Q3 increased to about $113 per megawatt hour from $106 in Q2 due to modestly higher prices in both Germany and Canada.

本季售電量總計 254 吉瓦時，由於第三季計畫停工天數減少，較第二季略有成長。由於德國和加拿大價格小幅上漲，第三季的價格從第二季的 106 美元/兆瓦時上漲至約 113 美元/兆瓦時。

Our mass timber business continues to ramp up operations, resulting in revenue of $19 million in Q3 compared to $14 million in Q2. This business also has a growing order book that we expect to fulfill over the coming months.

我們的大宗木材業務繼續擴大運營，第三季的收入為 1,900 萬美元，而第二季為 1,400 萬美元。該業務的訂單量也不斷增加，我們預計將在未來幾個月內完成。

All in all, we reported a consolidated net loss of $26 million for the third quarter, or $0.39 per share, compared to a net loss of $98 million or $1.48 per share in Q2. Cash generated in the quarter totaled $130 million compared to cash used of $87 million in Q2. In Q3, cash generated from the senior note offering and positive EBITDA was offset by a higher net working capital balance, primarily due to the timing of tax and interest payments despite a reduction in inventory levels.

總而言之，我們報告第三季綜合淨虧損為 2,600 萬美元，即每股 0.39 美元，而第二季淨虧損為 9,800 萬美元，即每股 1.48 美元。本季產生的現金總計 1.3 億美元，而第二季使用的現金為 8,700 萬美元。第三季度，優先票據發行和正 EBITDA 產生的現金被較高的淨營運資本餘額所抵消，這主要是由於儘管庫存水準下降，但稅款和利息支付的時間安排。

Looking ahead, we expect a modest working capital reduction in Q4 due to further restrictions -- sorry, further reductions in finished goods and raw material inventories. In Q3, we invested about $37 million of capital in our mills. And looking ahead, we currently expect capital spending to be about $140 million in 2023.

展望未來，我們預計由於進一步的限制，第四季度的營運資金將小幅減少——抱歉，成品和原材料庫存將進一步減少。第三季度，我們向工廠投資了約 3,700 萬美元的資金。展望未來，我們目前預期 2023 年資本支出約為 1.4 億美元。

In September, we took important steps to enhance Mercer's liquidity position to ensure strong liquidity through the business cycle. These steps included completing a private offering for $200 million of senior notes due in 2028 and as well as increasing the availability of our German revolving credit facility by about EUR 70 million to EUR 370 million. The new 2028 senior notes' carrying interest rate of 12.875%.

9 月份，我們採取了重要措施來增強美世的流動性狀況，以確保整個商業週期擁有強勁的流動性。這些步驟包括完成 2028 年到期的 2 億美元優先票據的私募發行，以及將我們的德國循環信貸額度的可用性增加約 7,000 萬歐元，達到 3.7 億歐元。新的2028年優先票據的帳面利率為12.875%。

At the end of Q3, our liquidity position totaled $648 million, comprised of $344 million of cash and about $305 million of undrawn revolvers. And as you would have noted from our press release, our Board has approved a quarterly dividend of $0.075 per share for shareholders of record on December 20, for which payment will be made on December 28.

截至第三季末，我們的流動性部位總計 6.48 億美元，其中包括 3.44 億美元現金和約 3.05 億美元未提取的左輪手槍。正如您從我們的新聞稿中註意到的那樣，我們的董事會已於 12 月 20 日批准向登記在冊的股東派發每股 0.075 美元的季度股息，並將於 12 月 28 日支付。

That ends my overview of the financial results. I'll now turn the call over to Juan Carlos.

我對財務表現的概述到此結束。我現在將電話轉給胡安·卡洛斯。

Thank you, Rich. Good morning, everybody. Financially, Q3 was significantly better than our second quarter. Our production costs, including fiber, all trended down this quarter. Lower costs, combined with modest price increases in some of our markets, led to a significantly improved EBITDA result. And although the markets where we operate are still at historically low levels of pricing and have relatively weaker demand than expected, we're seeing some selective modest recovery but varying by geography.

謝謝你，里奇。大家早安。從財務角度來看，第三季明顯優於第二季。我們的生產成本（包括纖維）本季均呈下降趨勢。較低的成本加上我們一些市場的適度價格上漲，導致 EBITDA 結果顯著改善。儘管我們經營的市場仍處於歷史低位，且需求低於預期，但我們看到了一些選擇性的溫和復甦，但因地理位置而異。

As a result of uncertain market conditions, we have taken proactive actions throughout this year to reduce our planned CapEx, as we had already signaled in the previous quarter, and now expect to land at around $140 million for the full year. At the same time, we continue our focus on cost-saving measures and aggressively managing our inventories during this third quarter. And we will continue this financial discipline while our markets remain weak.

由於市場狀況不確定，我們今年全年採取了積極行動，以減少我們計劃的資本支出，正如我們在上一季已經表示的那樣，現在預計全年資本支出將達到 1.4 億美元左右。同時，我們在第三季度繼續專注於成本節約措施並積極管理庫存。在我們的市場仍然疲軟的情況下，我們將繼續實行這種財務紀律。

I am pleased with our efforts to increase our liquidity this quarter. Our $200 million senior note private placement and the EUR 70 million increase to our German revolving credit facility leave us well positioned to continue to execute our strategic plan through this business cycle. We recognize that these 2028 senior notes come with a high cost at 12.875%. But given the depth and uncertainty around this downcycle in our markets, we felt it prudent to ensure Mercer has strong liquidity through this cycle.

我對本季我們為增加流動性所做的努力感到高興。我們的 2 億美元優先票據私募以及德國循環信貸額度增加 7,000 萬歐元，使我們能夠在本商業週期中繼續執行我們的戰略計劃。我們認識到這些 2028 年優先票據的成本很高，高達 12.875%。但考慮到市場下行週期的深度和不確定性，我們認為確保美世在這一周期中擁有強勁的流動性是謹慎的做法。

It is also important to note that the investments we have made in our solid wood segment over the last year, namely the acquisition of Torgau and Structurlam, were primarily done with our own cash. And in the fullness of time, these investments are expected to provide returns well in excess of the cost of these new notes.

還需要注意的是，我們去年在實木領域的投資，即收購 Torgau 和 Structurlam，主要是用我們自己的現金完成的。隨著時間的推移，這些投資預計將提供遠遠超過這些新票據成本的回報。

Overall, pulp markets remain weak, but all markets appear to have hit their floors with modest price increases implemented in either Q3 or early Q4. For NBSK, these increases appear to be the result of paper producer restocking, a reaction that is likely due to the realization that softwood pulp supply is down roughly 1 million tonnes on an annualized basis between mill closures, conversions and curtailments. Most of these tonnes are permanently removed from the market, which will positively impact pulp markets when demand begins to improve.

總體而言，紙漿市場仍然疲軟，但所有市場似乎都已觸底，第三季或第四季初實施了小幅價格上漲。對於 NBSK 來說，這些增長似乎是造紙生產商補充庫存的結果，這一反應可能是由於意識到在工廠關閉、轉換和削減期間針葉木漿供應量按年計算減少了約 100 萬噸。其中大部分噸將永久退出市場，當需求開始改善時，這將對紙漿市場產生正面影響。

On the demand side, European paper producers continue to run at reduced capacity rates as the European economy remains weak. Plus it continues to deal with the effects stemming from the Ukraine war. Similarly, in China, the government is pursuing measured economic stimulus steps. But weak economic growth continues in light of significant risks faced by the real estate industry. Looking forward, we expect pulp prices to continue to slowly increase in Europe and North America in Q4 as reduced supply supports modest price improvements.

在需求方面，由於歐洲經濟依然疲軟，歐洲造紙生產商持續以較低的產能運作。此外，它還繼續應對烏克蘭戰爭帶來的影響。同樣，在中國，政府正在採取謹慎的經濟刺激措施。但鑑於房地產業面臨重大風險，經濟成長持續疲軟。展望未來，我們預計第四季度歐洲和北美的紙漿價格將繼續緩慢上漲，因為供應減少支持價格小幅上漲。

As a result of the logistical issues created by the recent British Columbia port strike, we were forced to take a temporary 26-day curtailment at our Celgar mill during the month of August. This was not a decision we made lightly but was necessary to manage the finished goods inventory at the mill.

由於最近不列顛哥倫比亞省港口罷工造成的物流問題，我們的 Celgar 工廠被迫在 8 月臨時停產 26 天。這不是我們輕易做出的決定，而是管理工廠成品庫存所必需的。

And we used this time to renegotiate our fiber supply contracts and are now seeing the benefits of it as our wood costs have come down, and this is already visible in our results. Our mills ran very well in the quarter, although the logistics-related curtailment at Celgar resulting from this port issue negatively impacted pulp production relatively through the second quarter.

我們利用這段時間重新談判我們的纖維供應合同，現在看到了它的好處，因為我們的木材成本下降了，這已經在我們的結果中可見。我們的工廠在本季度運作良好，儘管由於該港口問題導致 Celgar 物流相關的縮減對整個第二季度的紙漿生產產生了相對負面的影響。

Our scheduled maintenance was down from 25 days, or roughly 25,000 tonnes in Q2, to only 13 days in Q3, all concentrated in a very well-executed shot at Rosenthal, reducing 30,000 tonnes of production as planned. Now for this fourth quarter, our annual maintenance schedule includes Stendal taking a short 3-day shut that will include all the final repairs to the wood yards' conveyor system that was damaged by the fire in Q3 of last year; and Celgar taking a major 26-day maintenance in Q4, or roughly 41,000 tonnes of production in total.

我們的計劃維護時間從第二季度的 25 天（約 25,000 噸）減少到第三季度的僅 13 天，所有這些都集中在 Rosenthal 執行得非常好的一次射擊中，按計劃減少了 30,000 噸產量。現在，在第四季度，我們的年度維護計劃包括施滕達爾短暫關閉 3 天，其中包括對去年第三季度火災損壞的木場輸送系統的所有最終維修； Celgar 在第四季度進行了為期 26 天的大規模維護，總產量約為 41,000 噸。

Moving to our solid wood segment. Our third quarter results reflected mixed markets, particularly in lumber, with the U.S. market being up slightly on average while the European markets was down compared to Q2. High interest rates continue to weigh on housing starts, which are expected to keep lumber prices range-bound through Q4.

轉向我們的實木部分。我們第三季的業績反映了不同的市場，特別是木材市場，與第二季相比，美國市場平均略有上升，而歐洲市場則有所下降。高利率繼續對新屋開工造成壓力，預計這將使木材價格在第四季度保持區間波動。

We continue to believe that low lumber channel inventories, the large number of sawmill curtailments, relatively low housing stock, wood shortages created by recent Canadian forest fires and constructive homeowners' demographics are still very strong fundamentals for the construction industry. And this will put positive pressure on the supply-demand balance of this business in the mid-term.

我們仍然認為，低木材渠道庫存、大量鋸木廠的削減、相對較低的住房庫存、最近加拿大森林火災造成的木材短缺以及建設性房主的人口統計數據仍然是建築業非常強勁的基本面。而這將對中期該業務的供需平衡產生正面壓力。

We will continue to optimize our mix of lumber products and customers to current market conditions. As such, in Q3, slightly less than half of our lumber sales volumes were sold in the U.S., substituting volumes that otherwise would be destined for Europe and other markets.

我們將繼續根據當前的市場狀況來優化我們的木材產品和客戶組合。因此，在第三季度，我們的木材銷售略低於一半是在美國銷售的，取代了原本運往歐洲和其他市場的銷售量。

The integration of Torgau continues to progress well, although shipping pallet markets remain weak on the back of a weak European economy overall while heating pellet prices were up roughly 20% due to seasonal demand relative to Q2. Once the European economy begins to show signs of recovery, we expect pallet prices to return to normal levels, allowing this asset to deliver significant shareholder value through the sale of pallets and increased lumber sales.

托爾高的整合繼續進展順利，儘管由於歐洲整體經濟疲軟，運輸托盤市場仍然疲軟，而加熱顆粒價格由於相對於第二季度的季節性需求上漲了約 20%。一旦歐洲經濟開始顯示復甦跡象，我們預計托盤價格將恢復到正常水平，從而使該資產能夠透過托盤銷售和增加木材銷售為股東帶來巨大價值。

In addition, the integration of the Structurlam assets continues to progress as planned. We now have roughly 35% of North American mass timber production capacity, a broader range of product offerings and a much larger geographic footprint, which gives us competitive access to the entire North American market. We continue to see strong customer interest in our mass timber products, which has made our order file stronger and including now several large marquee projects that we're very proud of.

此外，Structurlam 資產的整合繼續按計劃進行。我們現在擁有北美約 35% 的大規模木材生產能力、更廣泛的產品範圍和更大的地理覆蓋範圍，這使我們能夠在進入整個北美市場時具有競爭力。我們繼續看到客戶對我們的大規模木材產品產生濃厚的興趣，這使我們的訂單文件更加強大，其中包括現在我們非常自豪的幾個大型大型項目。

Moving on to costs of fiber overall. We experienced a decrease in pulpwood prices in Q3. In Germany, a steady supply of sawmill chips resulted in cost decreases. But work done at our Canadian mills, including the ramp-up of Peace River's woodroom and the renegotiation of contracts in Celgar, pushed our fiber costs down in Q3. Looking ahead, we expect further modest declines in pulpwood costs at all of our mills in Q4.

接下來討論光纖的整體成本。第三季紙漿木材價格下降。在德國，鋸木廠木片的穩定供應導致成本下降。但我們加拿大工廠所做的工作，包括 Peace River 木房的產能提升和 Celgar 合約的重新談判，推動了我們第三季的纖維成本下降。展望未來，我們預計第四季所有工廠的紙漿木材成本將進一步小幅下降。

Our new lignin extraction pilot plant continues its ramp-up as planned. As a reminder, this new lignin plant is a large step towards Mercer being able to begin commercialization of lignin. We're excited about the future prospects of this product as a sustainable alternative to fossil fuel-based products, such as in adhesives and advanced battery elements to only name a few. This aligns perfectly with our strategy, which involves expanding into green chemicals and products that are compatible with the circular carbon economy.

我們新的木質素提取試點工廠繼續按計劃進行產能提升。提醒一下，這座新的木質素工廠是美世邁向木質素商業化的一大步。我們對該產品作為化石燃料產品的可持續替代品（例如黏合劑和先進電池元件等）的未來前景感到興奮。這與我們的策略完全一致，該策略涉及擴展到與循環碳經濟相容的綠色化學品和產品。

As the world becomes more sensitive to reducing carbon emissions, we believe that products like lignin, mass timber, green energy, lumber and pulp will play increasingly important roles in displacing carbon-intensive products, products like concrete and steel for construction or plastic for packaging. Furthermore, the potential demand for sustainable fossil fuel substitutes is very significant and has the potential to be transformative to the wood products industry.

隨著世界對減少碳排放越來越敏感，我們相信木質素、大塊木材、綠色能源、木材和紙漿等產品將在取代碳密集型產品（例如建築用混凝土和鋼材或包裝用塑膠）方面發揮越來越重要的作用。此外，對永續化石燃料替代品的潛在需求非常巨大，有可能為木製品產業帶來改變。

We are committed to our 2030 carbon reduction targets and believe our products form part of the climate change solution. In fact, we believe that in the fullness of time, demand for our low-carbon products will dramatically increase as the world looks for solutions to reduce its carbon emissions. We remain bullish on the long-term value of pulp and are committed to better balance our company through faster growth in our lumber and mass timber businesses.

我們致力於實現 2030 年碳減排目標，並相信我們的產品是氣候變遷解決方案的一部分。事實上，我們相信，隨著世界尋求減少碳排放的解決方案，隨著時間的推移，對我們低碳產品的需求將會急劇增加。我們仍然看好紙漿的長期價值，並致力於透過木材和大宗木材業務的更快成長來更好地平衡我們的公司。

In closing, looking forward to Q4, we will remain focused on our cost reduction, CapEx and working capital initiatives while we navigate this period of low pulp and lumber prices. We will continue to work on rebalancing our assets in line with the execution of our strategic plan and will continue to manage our cash and liquidity prudently.

最後，展望第四季度，我們將繼續專注於降低成本、資本支出和營運資本計劃，同時度過這段紙漿和木材價格較低的時期。我們將繼續根據戰略計劃的執行重新平衡我們的資產，並將繼續審慎管理我們的現金和流動性。

Thanks for listening. And I will now turn the call back to the operator for questions. Thanks.

感謝收聽。現在我將把電話轉回給接線員詢問問題。謝謝。

(Operator Instructions) Our first question comes from Hamir Patel with CIBC.

（操作員說明）我們的第一個問題來自 CIBC 的 Hamir Patel。

Juan Carlos, how much longer would you expect to benefit from the cheaper beetle wood in Europe? And longer term, how do you think about the risks to fiber availability, just given how the beetle played out in British Columbia?

胡安卡洛斯，您預計還能從歐洲更便宜的甲蟲木材中受益多久？從長遠來看，考慮到甲蟲在不列顛哥倫比亞省的表現，您如何看待光纖可用性的風險？

Yes, thank you, Hamir. Yes, very important issue and one that we're following very closely for obvious reasons. We believe that the beetle infestation would support lower prices for wood throughout most of 2024. And that's what we've dialed in, into our estimates, already thinking about what next year would look like so that not only Q4 but a large majority of 2024 should be benefiting by the impact of beetle infestation.

是的，謝謝你，哈米爾。是的，這是非常重要的問題，出於顯而易見的原因，我們正在密切關注這個問題。我們認為，甲蟲侵擾將在2024 年的大部分時間支撐木材價格的下跌。這就是我們在估算中所考慮的內容，我們已經在考慮明年的情況，因此不僅是第四季度，而且是2024 年的大部分時間應該受益於甲蟲侵擾的影響。

Having said that, obviously, we monitor very closely how the whole access to wood or fiber in Europe has progressed. And this is something that we keep on in a rate of one of the things that we take advantage of is our Mercer Holz entity allows us to supply wood from all around Europe in a very efficient way. So we keep on putting a lot of emphasis on making sure that we maintain that differentiator from our side on fiber supply while we monitor the evolution of these beetle infestation.

話雖如此，顯然我們非常密切地關注歐洲木材或纖維的整體獲取進展。我們一直堅持這一點，我們利用的優勢之一是我們的 Mercer Holz 實體使我們能夠以非常有效的方式供應來自歐洲各地的木材。因此，我們在監測這些甲蟲侵擾的演變的同時，繼續非常重視確保我們在纖維供應方面保持差異化。

Fair enough. And just the last question I had for Rich, how are you thinking about CapEx for 2024? And what are the larger growth projects that you'd expect to advance next year?

很公平。我問 Rich 的最後一個問題是，您如何看待 2024 年的資本支出？您預計明年將推動哪些更大的成長項目？

Yes. So I think we're still going to have a pretty subdued CapEx plan for next year. So it's not a lot of strategic initiatives. And I think we're going to sort of see how the year plays out. But it will be on the lower end, probably in the $100 million neighborhood, I think, at this point.

是的。因此，我認為明年我們的資本支出計劃仍然相當溫和。所以這並不是很多策略舉措。我認為我們將看看今年的情況如何。但目前它的價格將處於較低水平，我認為可能在 1 億美元左右。

Our next question comes from Sean Steuart with TD Securities.

我們的下一個問題來自道明證券的 Sean Steuart。

Juan Carlos, you mentioned the restocking efforts that are happening in pulp in China. And I guess, I'm wondering your assessment of how much of this is just inventory arbitrage and buying aggressively at the bottom versus actual consumption. It feels like paper markets in China aren't necessarily strong, so would be interested in your perspective on the sustainability of price momentum we're seeing right now.

胡安卡洛斯，您提到了中國正在進行的紙漿補貨工作。我想，我想知道您對其中有多少只是庫存套利和在底部積極購買與實際消費的評估。感覺中國的紙張市場不一定強勁，因此我們對您對我們目前看到的價格勢頭可持續性的看法感興趣。

Thank you, Sean. Yes, what you say is absolutely correct. There's -- and I would say there's a little bit of both. I wouldn't attribute to only one of these factors. I think that there is some increase in consumption in China from just on the sake of the new plants that have been put up, both in tissue and paper, that are obviously demanding pulp. What I see the weakness though is in the actual market for those products from that point onwards. So while pulp might be consumed, the marketing of those paper products, I think, is -- will take longer than it usually does.

謝謝你，肖恩。是的，你說的完全正確。我想說兩者都有一點。我不會僅將其歸因於其中一個因素。我認為中國的消費量增加，因為新工廠的建成，無論是生活紙還是紙張，顯然都需要紙漿。但我認為從那時起這些產品的實際市場就出現了弱點。因此，雖然紙漿可能會被消耗，但我認為，這些紙製品的行銷將比平常花費更長的時間。

On the other side of the spectrum, in fact, as you started your question, we do believe that there's a lot of arbitrage of inventory going on. And that's why we remain cautious about any increases right now out of China. We see that in Europe and in North America, things are picking up. So they are obviously lower than China right now. So they have still space to pick up along the quarter. But I wouldn't be overly optimistic about China prices developing much stronger until we really see some demand kicking in.

另一方面，事實上，當您開始提問時，我們確實認為存在大量庫存套利行為。這就是為什麼我們對中國目前的任何成長保持謹慎的原因。我們看到歐洲和北美的情況正在好轉。所以他們現在明顯低於中國。因此，他們在本季仍有回升的空間。但在我們真正看到一些需求開始出現之前，我不會對中國價格的強勁發展過於樂觀。

Now having said that, since the NBSK supply equation is, in our view, so tight with so many curtailments happening and so many closures of different mills, we do believe that if there is a reaction from a demand side, particularly in Europe that has been very dormant or even North America, we could see that could be a catalyst for a real recovery in prices. But as everybody knows, it's not clearly in the picture nowadays when Europe or North America would start picking up strong momentum. So we'll have to see. We're very cautious about pricing for the next few quarters.

話雖如此，我們認為，由於 NBSK 的供應方程式非常緊張，發生瞭如此多的減產，並關閉了許多不同的鋼廠，我們確實相信，如果需求方做出反應，特別是在歐洲，甚至北美一直處於休眠狀態，我們可以看到這可能成為價格真正復甦的催化劑。但眾所周知，目前還不清楚歐洲或北美何時會開始強勁勢頭。所以我們得看看。我們對未來幾季的定價非常謹慎。

That's helpful. Second question, it does seem like Torgau is an ongoing drag on results of the wood product segment. You touched on pallet markets. Any thoughts on repositioning of the product mix, which is something you talked about before? Does that take a backseat until you have clarity on broader balance sheet improvement for the company? How has the thinking evolved with respect to changing the product mix at Torgau?

這很有幫助。第二個問題，托爾高似乎確實持續拖累木製品領域的表現。您談到了托盤市場。您之前談過對產品組合的重新定位有什麼想法嗎？在您清楚了解公司更廣泛的資產負債表改善之前，這是否會退居二線？托爾高在改變產品結構上的想法是如何演變的？

Very important matter. When you look at Torgau, one of the things that we are doing since pallet prices are very depressed historically based on the fact that Europe is -- very little is moving in Europe right now from an economic perspective, things are very, very slow. Based on that, what we've done, since we have capacity installed to produce pallets, we have rearranged our product portfolio and have changed a little bit more in the type of pallets that we're able to produce and which markets we can serve them into, open new markets for some of them and go for the higher value markets for us.

非常重要的事情。當你看到托爾高時，我們正在做的事情之一是因為歷史上托盤價格非常低迷，這是基於歐洲的事實——從經濟角度來看，歐洲現在幾乎沒有什麼進展，事情非常非常緩慢。基於此，我們所做的，由於我們已經安裝了生產托盤的能力，我們重新安排了我們的產品組合，並對我們能夠生產的托盤類型和我們可以服務的市場進行了更多的改變他們進入，為其中一些人打開新市場，並為我們進入更高價值的市場。

So that's a little bit of what we've done behind the scenes on the pallet market. And we've kind of made changes throughout the sales organization that we had or the Torgau had prior to our acquisition. So that's been one change from our end with the existing footprint. Now on the other hand, we have started some of the transformation projects in Torgau so that we can significantly take advantage of the capacity that the mill can offer from a lumber perspective. Some of those projects we've kind of put on the back burner for the time being. We know that once we restart them, they will soon be into fruition.

這就是我們在托盤市場幕後所做的一些工作。我們對我們或 Torgau 在收購之前的整個銷售組織進行了一些改變。這是我們對現有足跡的改變。另一方面，現在我們已經在托爾高啟動了一些改造項目，以便我們可以從木材的角度充分利用工廠的產能。其中一些項目我們暫時擱置了。我們知道，一旦我們重新啟動它們，它們很快就會取得成果。

So we're cautiously -- as you well said, we're cautiously looking at how the market develops, how our cash flow and our liquidity evolves so that we can trigger the continuation and finalize those transformative projects for Torgau, which would give us the advantage obviously of a much larger production of lumber. It wouldn't make a whole lot of sense to produce a whole lot of lumber right now at the current prices. But we do want to be ready when the prices pick up and therefore us having a larger capacity to produce higher volumes of lumber by then.

因此，正如您所說，我們正在謹慎地關注市場如何發展，我們的現金流和流動性如何發展，以便我們能夠觸發延續並最終完成托爾高的那些變革性項目，這將使我們木材產量大得多的優勢顯而易見。現在以當前價格生產大量木材沒有多大意義。但我們確實希望在價格上漲時做好準備，因此到那時我們就有更大的能力生產更多的木材。

Our next question comes from Matthew McKellar with RBC.

我們的下一個問題來自 RBC 的 Matthew McKellar。

I'd like to stick with the pallet market to start with. Should we be looking just to a general economic recovery in Europe as we think about what could kind of cause a recovery in the pallet markets? Or given that Torgau is one of the larger facilities in Europe and is likely EBITDA negative and the pallets have finite lives, could that market begin to tighten even absent a broader economic recovery?

我想先關注托盤市場。當我們思考什麼可能導致托盤市場復甦時，我們是否應該只關注歐洲的總體經濟復甦？或者考慮到托爾高是歐洲較大的工廠之一，而 EBITDA 可能為負，而且托盤的使用壽命有限，即使沒有更廣泛的經濟復甦，該市場是否也會開始收緊？

Matthew, we do believe that this is very much linked to Europe's economy not moving. When you think about pallets, it's all about commerce. It's all about shipping products here and there. And basically, when you look at Germany overall, Germany being one of the most important economies in Europe, is probably the one that has suffered the most and it's actually going under a recession.

馬修，我們確實認為這與歐洲經濟停滯不前有很大關係。當您想到托盤時，一切都與商業有關。這一切都是為了將產品運送到各處。基本上，當你縱觀德國整體時，德國是歐洲最重要的經濟體之一，也可能是遭受最嚴重的經濟體，實際上正在陷入衰退。

So we do believe that only when we see some recovery from an economic perspective, GDP overall in Europe, we will see an immediate move towards a higher use of pallets. And therefore, with higher demand, we would expect higher prices. So that's really what we're -- what we believe we're up against. And that's where all our -- kind of our chips are based on that premise, which we believe holds very true.

因此，我們確實相信，只有當我們從經濟角度看到歐洲整體 GDP 有所復甦時，我們才會立即看到更多托盤的使用。因此，隨著需求的增加，我們預期價格也會上漲。這就是我們真正面臨的問題——我們相信我們所面臨的問題。這就是我們所有的晶片都基於這個前提，我們相信這是非常正確的。

Okay. Maybe switching over to manufactured products and mass timber, are you able to talk about whether you're EBITDA positive at this point? And then how should we think about a reasonable target for 2024 revenues in that business, just given what you're seeing in terms of kind of inbound inquiries and backlog in that business at present?

好的。也許轉向製成品和大量木材，您能談談您目前的 EBITDA 是否為正值嗎？那麼，考慮到目前該業務的入站查詢和積壓情況，我們應該如何考慮該業務 2024 年收入的合理目標？

Yes. The business, as we mentioned in the call, has been progressing pretty well. Since we acquired Structurlam, the interest and the level of inquiries multiplied significantly, putting a lot of pressure on our teams to be able to deliver on all the design work that is required for this business prior to being able to close any deals. As such, we're seeing a very significant growth, not only we already saw it in Q3 versus Q2 but also when you -- back to your question of when we look at next year, we most likely would be at least twice in terms of revenue as we have -- as we will close in Q4.

是的。正如我們在電話中提到的，這項業務進展順利。自從我們收購 Structurlam 以來，人們的興趣和詢問水平顯著增加，這給我們的團隊帶來了很大的壓力，要求我們能夠在完成任何交易之前完成該業務所需的所有設計工作。因此，我們看到了非常顯著的增長，不僅我們在第三季度與第二季度相比已經看到了這一增長，而且當你回到你的問題，即我們何時考慮明年時，我們很可能至少會成長兩倍我們將在第四季關閉營收。

So we're thinking that for next year, we should be around $120 million-plus in terms of sales. And that's again twice of what we will finish by the end of this year. And we're very, very close to being breakeven now. So we're again very confident that it will be a positive contributor overall very soon to our company.

因此，我們認為明年的銷售額應該達到 1.2 億美元以上。這又是我們今年底完成任務的兩倍。我們現在非常非常接近收支平衡。因此，我們再次非常有信心它將很快為我們公司帶來積極的貢獻。

Great. That's helpful. Last one to close, I'd like to ask about just the dividend here and the level of commitment when it comes to maintaining it. Do you think you're getting credit for the dividend? And do you view it as something you'd like to maintain, just given the broader company focus on optimizing liquidity and the cost of debt?

偉大的。這很有幫助。最後一個問題是，我想問這裡的股利以及維持股利的承諾水準。您認為您獲得了股息嗎？鑑於公司更廣泛地專注於優化流動性和債務成本，您是否認為這是您想要維持的？

Juan Carlos, do you want me to take that one?

胡安卡洛斯，你想讓我拿那個嗎？

Yes, feel free, Rich.

是的，隨意，里奇。

Yes, so Matt, the -- I think it's probably fair to say the Board is very committed to the dividend through the cycle. Every quarter, they look at our leverage, our balance sheet metrics, I mean, our capital allocation plans. And so this was a big discussion for sure. But we're projecting modestly improving financial results as we go through the rest of this year and into 2023. So they're very committed to the dividend but just didn't think now is the time to be changing it.

是的，所以馬特，我認為可以公平地說，董事會非常致力於整個週期的股息。每個季度，他們都會查看我們的槓桿率、我們的資產負債表指標，我的意思是，我們的資本配置計劃。所以這肯定是一個大討論。但我們預計，隨著今年剩餘時間和 2023 年的到來，財務業績將略有改善。因此，他們非常致力於股息，但認為現在不是改變股息的時候。

(Operator Instructions) Our next question comes from Sam McGovern with UBS.

（操作員說明）我們的下一個問題來自瑞銀集團的山姆麥戈文。

Following the recent bond deal, you guys have lots of liquidity. How do you think about what a normalized level would be? And can you also discuss possible uses for the excess liquidity once earnings return to a more normalized level?

在最近的債券交易之後，你們擁有大量的流動性。您如何看待標準化水平？您能否討論一下，一旦盈利恢復到更正常的水平，過剩流動性的可能用途？

Okay. So I would say probably, we probably averaged about $500 million of liquidity over the last probably 2 years. We've always liked to have dry powder, as we used to say, just because we have been able to use that liquidity to invest in things like Torgau and our mass timber businesses. So I'd like to have that available, especially given the volatility in our industry. So I would probably say that's our target.

好的。所以我想說，在過去的兩年裡，我們的平均流動性可能約為 5 億美元。正如我們過去常說的，我們一直喜歡擁有乾粉，只是因為我們能夠利用這種流動性來投資托爾高和我們的大型木材業務等項目。所以我希望能夠提供這一點，特別是考慮到我們行業的波動性。所以我可能會說這就是我們的目標。

But as we sort of come out of this downcycle, as Juan Carlos mentioned earlier, Torgau is a big area of focus for us for some value-add investments there. And our mass timber business as well, there's some things we want to do there to lower our cost at our Spokane mill and a little bit more efficiency at the Conway plant as well. So I think those will be the main areas of focus as we move forward.

但正如胡安·卡洛斯之前提到的，隨著我們走出這個下行週期，托爾高是我們在那裡進行一些增值投資的一個重點領域。還有我們的大規模木材業務，我們想做一些事情來降低斯波坎工廠的成本，並提高康威工廠的效率。因此，我認為這些將是我們前進的主要關注領域。

And I'd now like to turn the call back over to Juan Carlos Bueno for any closing remarks.

現在我想將電話轉回給胡安·卡洛斯·布埃諾（Juan Carlos Bueno），讓其結束語。

Thank you very much, operator, and thank you all for joining our call. Rich and I are available to talk more at any time, so don't hesitate to call either one of us. Otherwise, we look forward to speaking to you again on our next earnings call in February. Bye for now.

非常感謝您，接線生，也感謝大家加入我們的通話。里奇和我可以隨時進行更多交談，因此請隨時致電我們中的任何一個人。否則，我們期待在二月份的下一次財報電話會議上再次與您交談。暫時再見。

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。