Q3 2021 Cascades Inc Earnings Call
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Morning, My name is Sylvie and I will be your conference operator today at this time I would like to welcome everyone to <unk> third quarter 2021 financial results Conference call. All lines are currently in listen only mode. After the Speakers' remarks, there will be a question and answer session I will now pass the call to Jennifer Aitken.
Director of Investor Relations for Cascade, Ms. Aitken you may begin your conference.
Thank you operator, good morning, everyone and thank you for joining our third quarter 2021 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 to.
The speakers on today's call will be Nashville, killed, President and CEO and Allan Hogg CFO.
Also joining us for the question and answer period at the end of the call our shelves Melo President and COO of containerboard packaging, Nick Jones, Lang, President and CEO of specialty products and John does it just <unk> President and C O L a tissue papers.
Before I turn the call over to my colleagues I would like to highlight that certain statements made during this call will discuss historical and forward looking matters.
Accuracy of these statements are 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 includes data that are not measures of performance under Ifr S.
Please refer to our Q3 2021 investor presentation for details this presentation, along with our third quarter press release can be found in the investors section of our website.
Have any questions. Please feel free to call us. After this session I will now turn the call over to our CEO Mario.
Thank you Jennifer and good morning, everyone.
Before going into detail for each of our businesses. Let me begin by saying that we are encouraged by our consolidated performance.
The important <unk> pressure on cost nothing would be raw material logistics and energy.
Announced the closure of our sale of our investment in order to meet you see on October 26.
All of these asset, 50% dividend increase and our active share buyback underscore our commitment to create value for cash and return capital to our shareholder.
Moving now to our financial results on a consolidated basis third quarter sales increased 2% from last year and 8% from Q2, while adjusted EBITDA decreased by 20% year over year and increased by 9% compared to the prior quarter.
Slides four and five provide.
Provide quarterly information for each of our business segments.
On the raw materials side highlighted on slide six.
The index price for OCC increase of 179% year over year and 15% from June.
As has been the case throughout the year. This reflects elevated domestic demand driven by strong containerboard industry production levels.
Average index price for White recycled paper grade also rose, notably in Q3, increasing 23% year over year and 30% from Q2.
On the margin pulp Virgin pulp side hardwood and softwood pulp prices, both increased year over year, but were more stable on a sequential basis.
Arguing index increase of 61% year over year, and 2% sequentially, while softwood pulp index prices rose, 35% from last year level, but decreased by 4% from Q2.
Moving now to some brief comments on the results of each of our business segment highlighted on page seven through nine of the presentation.
Beginning with the sequential performance sales the containerboard segment increased 6% in Q3.
This reflects the rollout of price increases and a beneficial exchange rates, partially offset by a less favorable sales mix and lower volume.
The latter of these reflect the 2% decrease in shipments and a corresponding 2% decrease in our capacity utilization rate related to the production impact of the water effluent system issue.
<unk> are complex and planned downtime at other mill, which removed a total of 21000.
Sure Tom.
In the quarter.
Production has returned to a normalized level.
As we mentioned in our Q2 call the modernization of our interior can birthday platform involves transferring Boston two other facilities.
The addition of these initiatives begin at the end of Q3, but slightly impact converting shipment in the current quarter as the Kidman was ramping up.
Regarding shipment decreased by 3% in millions of square feet underperforming the 1% increase in the Canadian market and a 2% decrease registered in the U S market for the period.
Q3, adjusted EBITDA of 94 million or 18, 5% on a margin basis was <unk> 6 million or 6% below Q2 levels. This reflect all your raw material costs, and an approximate $10 million impact stemming from the one or two when system issue just men.
Sure.
These impacts were partially offset by the continued roll out price increases and lower operational costs year over year sales were stable, reflecting your selling price offset by lower volume converting shipment decreased by four 7%.
This underperformed the Canadian and the U.
Market, which were stable year over year.
Adjusted EBITDA decreased 6% year over year, largely reflecting the impact from the issue.
Our <unk> complex and the ramp up of the Ontario converting equipment.
We are encouraged by the improved sequential performance of our tissue business sales were up 7% from Q2, reflecting a decrease of 8% and shipment levels and 7% and the average selling price.
Kidman for both away from home and retail converted product grew from the prior quarter up 12, and 60% respectively.
Adjusted EBITDA increased $11 million sequentially.
The benefit of higher volume and pricing and lower fixed costs, partially offset the impact of raw materials and production and energy cost inflation.
Year over year sales decreased 5% reflective of negative exchange rate effect and less favorable sales mix.
These were partially offset by better volume and pricing benefit realized in certain product categories.
Yes, just the Q3 EBITDA year over year shortfall reflect material prices and low average selling price driven by mix and exchange rates, which impacted results by $16 million and $15 million respectively.
The other input costs.
Also reflected inflationary pressure.
While market conditions for our tissue business has been exceptionally difficult in recent quarter due mostly to the pandemic.
We are encouraged by the more favorable sequential trend in the third quarter. This is in part a reflection of our market positioning as well as our cost and sales organization.
Amortization effort.
Specialty products segment generated solid Q3 results sequentially Q3 sales increased 10% from the acquired water, reflecting a combination of why your volume and more favorable exchange rate and price increases.
Adjusted EBITDA decreased $1 million sequentially with the benefit from higher volume and price increase.
I've said by how your subcontracting costs and impact of higher raw material prices in the molded pulp segment.
When compared to the prior year Q3 sales increased by $27 million or 23% with benefits from better volume and pricing in the auto segment more than offsetting the less favorable exchange rate.
Adjusted EBITDA level increased by $1 million year over year with yourselves and realise grabbed a sitting all your production costs.
I will now pass the call to island will discuss the main highlights of our financial performance and then yes. Thank you Matthew and good morning, everyone. So let me begin with a reminder, that following the sales of our equity position in railroad immediately results of the European box boat segment have been presented as discontinued.
As of the second quarter.
We provide relevant details regarding the changes to financially also said results on slide 10.
As detailed on slide 11, and 12 year over year, Q3 sales increased by $16 million or 2%.
We have already highlighted during this call. This was driven by a volume decrease in containerboard in the period with an unfavorable exchange rate also impacting sales levels for all of our business segments.
Pricing and sales mix were beneficial factors for our packaging segments.
On a sequential basis third quarter sales increased by $74 million or 8% largely reflecting improved.
<unk> and mix in all business segments and higher volumes in tissue.
The exchange rate was favorable for all of our business segments.
Moving now to operating income and adjusted EBITDA as highlighted on slide 13, Q3, adjusted EBITDA of $107 million decreased $26 million from the prior year level. The decrease was due to the lower results from the tissue segment and slightly lower results from containerboard.
Sequentially Q3, adjusted EBITDA increased by $9 million as shown on slide 14.
This was driven by the stronger tissue performance, reflecting volume sales mix and selling price improvements offset by slightly softer results in containerboard.
Our quarterly results continue to benefit from our margin improvement initiatives as we continue to surpass our objective of improving our EBITDA margin by 1% for the second consecutive year when compared to our baseline year of 2019.
On that basis, we have realized approximately $150 million in the first nine months and every initiative that we have implemented are mitigating market headwinds and cost inflation.
Slide 15, and 16 illustrate the specific items recorded during the quarter.
The main item is worth mentioning impacting operating income before depreciation or a $39 million gain on disposal of buildings in tissue that total of $5 million of impairment and restructuring charges and a $5 million unrealized loss on financial instruments.
Items impacting earnings are a 3 million foreign exchange loss on long term debt and financial instruments and $20 million gain on business combination in discontinued operation of our box Board Europe segment.
Slide 17 and into 18 illustrate the year over year and sequential volumes of our Q3 adjusted earnings per share and the reconciliation with the specific items that affected our quarterly results.
As reported earnings per share were <unk> 32 cents in the third quarter.
Compared to earnings per share of 51 since last year, both periods included specific items.
On an adjusted basis earnings per share decreased by 51 cents compared to last year as a result.
For our phase two results in a 32 cent.
Tax Laurie on same pack, resulting from an adjustment of tax assets in 2021, and a positive tax adjustment in 2020 were the main drivers of these volumes.
On an adjusted basis sequential third quarter NII per share decreased.
<unk> per share from the previous quarter levels, which include an adjustment of tax assets.
<unk> 19 SaaS.
As highlighted on slide 19 to third quarter adjusted cash flow from operations decreased by $17 million year over year to $70 million and adjusted free cash flow levels increased by a $12 million year over year. This reflected lower operating results and lower net.
Capex incurred in that period due to the $50 million.
Of sales proceeds of two buildings in our tissue segment.
Moving now to our net debt Reconsolidation as detailed on slide 20.
Net debt increased by $53 million in Q3, reflecting lower cash flow levels and negative exchange rate impact and regular capex dividend and working capital requirements. We also repurchased one 6 million shares under our normal course issuer bid.
For total amount of $26 million.
Our leverage ratio of three eight times is up from $2 five at the end of the second quarter, reflecting lower adjusted EBITDA levels.
Net debt as shown is adjusted to reflect the discontinued operation figures, but has not been adjusted to reflect the $450 million of net proceeds from the monetization of our equity position in Reno diminishing that closed on October 26.
Taking this into account leverage would be two eight times on a pro forma basis.
Financial ratios and information about maturities items detailed on slide 21.
Slide 22 provides details about our capital investment plans for 2021, we.
We are not expecting a range of $275 million to $300 million, which includes approximately 165 million of investments associated with died down and conversion project.
Capital expenditures totaled 54 million and disposal of assets amounted to $50 million in Q3 year to date net capital expenditures totaled $140 million, including 75 million for ballot.
Our total capex for the year is significantly lower than expected due to violent.
Initially this project had a budget of $190 million or 250 million Canadian.
This number has been revised down to 125 million U S or approximately $1 65 Canadian.
This reduction is mainly due to groundwork and major equipment deliveries that were expected in late Q4 that are in our plan in early 2022.
Payment term agreements with suppliers also created cash outflow to move to next year.
This does not impact the expected startup date of December 2022.
Due to a less favorable exchange rates increased cost of labor and major inflation seen in certain commodities like steel and concrete. The total budget of the project has been revised up by 20 million U S dollars to 400 million U S representing a 5% increase.
The Capex plan for this project in 2022.
Now stands at approximately $190 million and the remaining cash outflow will be in early 2023.
As you're starting a press release yesterday, we repurchased a total of almost $300 million of our 2026 and 2028 unsecured U S. Dollar senior notes this will improve our financial profile and reduced interest payments going forward by 16 million per year.
We believe that our forecasted free cash flow generation without cascade to both invest for the future manage our debt profile and also return capital to shareholders.
We will continue to invest in initiatives to increase efficiency productivity and competitive positioning of.
Our businesses across North America.
Island project is our top priority along with our commercial efforts in tissue to increase volume.
We will also continue to support strong demand growth and sustainable specialized packaging, while exploring opportunities to further increase our containerboard converting footprint.
Capital expenditures for 2022 are not.
Not yet definitive.
Spec them to be higher than the amount of 2021 that has been lowered due to determine timing of certain <unk> investments.
Mario will now conclude the call with some brief comments before we begin the questions.
Yes.
Thank you Ellen we provide.
Details regarding our near term outlook on slide 23 of the presentation. As a reminder, this outlook is based on what we are seeing to date and may change in the coming months, given the dynamic nature of the business circumstance.
Our near term outlook for containerboard segment is for stable sequential result, the main demand remains solid on both the manufacturing and converting side and results will benefit from the return to normalized production about warm Jaeger <unk> complex and the rollout of the announced price increase.
These factors are expected to offset higher raw material price and continued upward pressure on production costs.
Our Bear Island project is progressing as planned and sales commitment continued to be put in place we cannot confirm that 100% of year. One production uptake has been contracted and we have approximately 50% of the total plant capacity committed for a multiyear contract.
I'll then provide you update details about the forecasted cost of the project.
Results for the tissue segment are expected to also remained stable sequentially with.
With the usual seasonal softness upset by encouraging underlying trends as demand levels continue to normalize.
Input cost inflation will negatively impact performance, but is expected to be partially mitigated by benefit from announced price increase.
We also announced an additional price increase of up to 8% for away from home products effective January one across North America.
More broadly we anticipate that the ongoing economic reopening will benefit demand wafer mold market and that our targeted sales effort on the retail side, we will continue to bear fruit.
We are slowly restarting production lines that has been temporarily stopped in Q2 or in response to the sharp drop in demand and expect these ramp up to benefit efficiency levels and cost absorption going forward.
We will continue to manage labor availability challenge as we ramp up our production.
We are expecting slightly improved sequential results from the specialty product segment.
This reflects stable volume and a higher average selling price offsetting higher.
Raw material and insulin inflationary pressure on production and input costs.
Moving now to raw material until mid September OCC prices were being driven by robust domestic demand level and export prices.
We have seen easing more recently as generation level of dismiss AUO rose and export became increasingly constrained due to the supply chain interruption seen at port.
We would describe the market for OCC to date as being more favorable for buyer and material is readily available.
Our inventory are solid and we are being proactive ahead of the upcoming holiday season.
We have seen all year demand for white recycled ESOP and I agreed fiber related to gradually increase our away from home tissue production.
When combined with new tools fiber generation due to the ongoing limited office building activity. This has led to tighter market condition and higher prices in recent months we.
We have managed.
We have managed well despite these conditions and our meals remain adequately supplied.
The Virgin pulp side market condition for NBA SK at continue to ease in the third quarter with better condition and hardwood and eucalyptus grades.
Prices for these great as decline in volume are available.
More broadly we would note that logistical challenge continue to complicate material movement and impact market dynamic overall that said our mill continued to be well supported thanks to our long term supplier relation and prudent inventory strategy.
With that we will now be happy to answer your questions. Operator, Thank you Mr. <unk>.
Zavvi.
Posen films play come from facility, while CV, so looks like Levy telephonic.
C J will take us till <unk> wallet CBD.
Thank you if you would like to ask a question.
Please press Star then the number one on your telephone keypad and if you'd like to withdraw. Your question you will need to press star followed by two.
Again, if you have a question. Please press Star then one on your telephone keypad one moment, please while we compile the Q&A roster.
And your first question will be from Amir Patel at CIBC. Please go ahead.
Good morning.
Mario what there were some reports in the Quebec press the company monetizing an old warehouse.
In Laval for about $30 million.
October.
You see any other opportunities to rationalize that.
Craig maybe capture higher real estate values.
Well honestly.
It's something that we always do we look at our footprint look at are the <unk>.
Different buildings and when we asked to consolidate our platform are optimized.
Our footprint, we always look at it so.
Based on things that we are very are following very closely.
Short term, none because we feel that our <unk>.
These are integral to our business isn't often remote and isolated business building, so but we.
We are not against selling and the businesses that we haven't for use in the future when we rationalize our footprint.
But in the short term.
Have anything new.
Great. Thanks, Mario that that's helpful and.
Alan I, just wanted to turn to the Capex envelope or bear island.
It looks like it was characterized on the slides is $400 million now.
Got it.
I believe the last disclosure there was $3 80. So so is the increase reflect a is it just general cost inflation or have you added.
Additional equipment to the project.
No, it's mainly cost inflation, driven but I might just ask Charles to give you more color on this.
Hello.
So what we've done is we reviewed.
With the current cost inflation like steel concrete.
The increase also a cost of labor. These are the main components of the increases.
So we went a line by line to evaluate the best of our knowledge, where we would end up.
Great. Thanks, Thanks, Charles and chosen wondering if you could comment on what Youre seeing in containerboard markets.
In Q4, so far.
So the demand is.
It's still a good both on the <unk>.
The converting side.
So we are.
Cautiously optimistic if I can say that like that so the the volume the demand is still are still solid.
Compared to last year, where we had our strongest shipping quarter.
Order ever.
It's probably going to be a bit more normalized but still a very good for this time of the year.
Okay, great. Thanks, that's all I had I'll turn it over.
Thank you. Your next question will be from Sean Stewart of TD Securities. Please go ahead.
Thanks, Good morning, everyone.
Just following up on Amir's question on on the Capex budget for this year.
The revision for this year I know, there's some deferral for for Bear Island.
The $50 million in proceeds from the convert.
Converting asset sales this past quarter.
Is the new Capex guidance net of that $50 million or is it before those those proceeds.
Yes, it is net.
Okay.
And.
For Charles potentially.
Just trying to understand is there is cost inflation for bear island.
Spending has been pushed back.
Delays and we're seeing that across the sector.
Explain the confidence you have on the startup timeframe being intact for that asset and can you remind us of how we should think about the ramp up once that asset does start up.
Okay. So just I'm going to start with the delays so on the Capex.
<unk> are the main components of the change in this.
The output for the Capex.
Mainly due to deliveries of major components.
The paper machine and also the.
The major major components in their project that will come in early in Q1 2022.
We do have the luxury and bear island.
That we're not.
Building.
New building because it's already existing.
So our team right now.
I've been able to adapt the schedule.
With the reception of the equipment installation and and all of this we also had with the original schedule built in some contingencies. So we feel comfortable that our.
Our December 2014 date, there is still achievable.
The changes that we made to the schedule. So yes, we are comfortable with that date.
Knowing more about the volume ramping up if that's what your question on when it started so 2023.
The output of the mill would be about 280000 tons.
Okay.
Thanks for that detail.
Second question on tissue you touched on the away from home.
Alright, thank for Q4.
Can you review the other increases that.
Were initiated through the second half of the year, how much of those increase efforts were reflected in in Q3 price realizations and.
How should we think about the progression for price realizations in the fourth quarter and into early next year.
Yes.
Good morning, Sean There is limited.
<unk> between Q3 and Q4 in regard in regards of the retail price increase that we got last summer so pretty much all materialized in Q3, but it's more about the mix.
So we're selling less jumbo rolls, we used to so Q2 Q3, we sit your integration rates going up as volume is ramping up a bit.
And.
There is also other.
Efforts to customer to improve sales.
Sales mix portfolio.
It's pretty much the same in Q3 versus Q4.
Okay.
Okay. Thanks, very much everyone. That's all I have for now.
Thank you. Your next question will be from Mark Wilde at BMO. Please go ahead.
Thanks, Good morning, Mario Good morning, Alan.
Good morning, good morning.
Alan I wanted to just to start off.
Flat guidance for packaging for containerboard in the fourth quarter does that incorporate not having the issue at Niagara Falls.
Well thank.
Thank you Tyler.
Yes. It is expected that Negra falls will be backup up and running as we mentioned, but the major impact is the.
The full effect of raw material increases that happened in August and September so that will be fully reflected in Q4.
So that's been also maybe now with the recent $10 we might see.
Slight positive contribution but.
It is a major.
Impact offsetting the green tax effect in Q3 is the raw materials.
Okay Alright.
Can you just talk about how energy is affecting both.
Containerboard and tissue purchased energy.
Yes, well yes.
So energy is.
Is.
Obviously, increasing.
And now that we are entering.
Winter.
Inter season.
It will it's factored in in our Q4.
Forecasts.
Okay Alright.
And then corporate costs in the third quarter were a little lower than we were modeling can you give us a little color on that and also the expectations for the fourth quarter and beyond.
Yes in corporate.
There is also the our recovery business that is included in there so.
The recovery business is contributing.
Favorably compared to previous quarters, so that has an impact on when youll see the corporate segment.
General caution.
That is impacted in there.
<unk> is also can create variation, but the main impact is.
<unk> operations.
Okay, Alright, and then you bought back a lot of stock in the quarter.
I'd just like to get your thoughts on ink.
Incremental capital.
Returns in the wake up the Reno sale.
Well.
As we said.
When we announced the.
Sale of renewal, we said that we would look at managing our debt profile, that's what we did.
This week so.
In Canadian it's.
It's close to $400 million under $4 50 that we use on debt repurchase of notebooks.
We increase previously in Q2, our dividend and now with the share buyback that was exactly what we said.
When we announced the.
The sale of Reynolds.
That's what we did.
Okay, Alright, and then can we get some sense of kind of what the volume trends are looking like right now on a year over year basis in the away from home market.
It's progressing slowly like.
A few percent every month.
Kind of stabilizing October versus September so.
It's softer than a year, so thats why were.
Guiding pretty much flat.
But we hope that with the border reopening and Theres more and more people traveling we're still seeing the debt markets.
In the coming months.
Where would you put kind of the current volume right now relative to kind of what you think about as kind of baseline demand in away from home.
When we look at the <unk> number that market is still below the 2019 results.
So it's really tough to see what would be the new reality honestly.
Your Crystal ball is as good as mine them, but we hope that.
Yes.
<unk> become closer to 2019, probably end of next year My guess.
It's still going to take at least another year before it goes back to <unk>.
2019 results I think.
My own opinion.
My opinion.
Yes.
Finally for me any kind of thoughts on further consolidation and restructuring.
In the tissue market.
Or two ago one of your.
Your competitors in the consumer market made some fairly bearish.
Bearish comments.
On an earnings call I'd, just like to get your thoughts.
Hello.
Obviously taken would be beneficial if there were more consolidations.
At this point, we're not focused on that we are more focused on ramping up all the new lines that we installed and the integration of market for for US right now the places quite full with all.
All of this focus on filling up this capacity that we acquired mostly in the beginning of the beds. They make independent make is still hitting us hard it's difficult to see where the markets go away right now so.
Like I said, we're really more focused on capacity filling up the capacity, we have right now but.
Okay, Alright, that's fine that's I'll slip one more in here just.
In the specialty packaging business and that molded pulp business, we're hearing about sort of the egg producers moving away from kind of thermal form plastics and perhaps moving back the molded pulp can you talk about what you are saying.
Yes, Mark this is vishal.
Right.
We see the exact same thing.
This conversion from polystyrene carton.
As already started.
Years ago first move was going to.
And obviously, we see more and more pressure on the Marvel Paul.
The thing is.
We need to get the capacity in place you don't put capacity on mobile Capex quickly as you would put us in plastic and always longer longer projects to put the capacity in place.
We definitely see positive future in terms of mobile.
Hey, good industry.
Okay very good I'll turn it over thank you.
Thank you. Your next question will be from Paul Quinn at RBC. Please go ahead.
Yes, thanks, very much good morning, guys solid results.
Maybe just starting on.
On recovered paper prices one of your U S containerboard periods. This morning.
What's giving guidance going out.
Our financial guidance and their assumption on OCC was over about over $160 for the following four quarters is that consistent with what youre seeing in the marketplace and could you also give a guide on where you think sop.
This will be.
Okay Paul.
This is Rick again.
For the OCC at this moment, we see obviously, we are in the Io general efficiencies.
And the material is readily available.
Based on the observation we have of the market now.
You know the the trend we've seen in October and the price reduction could potentially continue in November.
This.
People eventually resolve II.
People are well in good position or to Thanksgiving and the holiday season in terms of inventory levels and we should not forget also that part is the currency limited you shortage of containers in the the poor congestion and we do expect something also is that the energy shortage in that.
<unk>.
Slowdown in paper Mills, as you're aware in China, and we'll have the collateral on the.
Paul first bump also the recycled pulp coming from other Asian countries. So I would say short term I would say.
Should be should be a more favorable comps.
OCC.
So this is a different story the market is.
Typhoon <unk>.
Very much connected to the.
The away from home market, which the tissue business, which is a significant significant consumer of.
The S&P so it really depends I'll quickly the away from home market will recover.
<unk> is not the challenge of supply and we do have but we don't expect.
That it was going to be commented favorable market for buyers over the next two weeks to months.
Great. That's helpful and then just over on Bear Island.
I appreciate the.
I think the guidance.
2023 production at 280000 tons.
If you could hold conditions flat, what youre seeing right now going into 2023, given the startup costs do you think that is.
Going to be a contributor to finances in that year.
Okay.
Sean do you want to take it or.
Just a fallout, yes, Alan I will take it.
Is your question that the first year.
The mill will be a positive contributor is that what youre asking.
Exactly yes.
That's an easy one.
No.
So based on our model and.
Like you mentioned with current condition then yes.
We have in our model that is going to be positively contributing.
Paul maybe we can we can just rely on what happened in Greenbank Greenbank was also.
Positively contributing quite rapidly and we learned from that obviously so.
Thank you.
Yes, Brian just figure that OCC prices are a lot higher than where <unk> started up that's all.
Thats all I had best of luck.
Thank you.
Thank you again, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
And your next question will be from Zachary Eversheds at National Bank Financial. Please go ahead.
Morning, everyone.
On the topic of containerboard converting capacity could you give us a little more color on the nature and scale of the opportunities that interest you.
I'm going to take that one Alan.
Yeah sure go ahead.
So we do have we.
We do have our eyes open on a unfortunately, Steve but we are.
There is selective.
You know that the last.
Investment that we made like.
Scatter way, which is very beneficial for our converting facility.
So yes, we're looking at opportunities.
And but we're also looking at investing in our current portfolio.
So we spoke about the project that we have in Ontario, where we made a major investment.
That have increased.
Our capacity.
And also reduce our.
A number of asset but better performing.
So when we're looking at the future there's going to be three things first investing in our current facility. The second is looking at a good a good assets.
But we're also looking at where we could do.
Another greenfield so.
These are the three places where we are.
We are focusing on and I just wanted to mention again that on the acquisition.
We wanted to be selective on the quality of the asset.
Because we want to invest in long term.
That's helpful. Thanks.
Are you.
Hiring going for Bear Island, how are you approaching that in the current tight market.
Yes.
So very good question annoying.
The market is a very challenging right now.
The hiring is going very well, we have about 25 employees right now on 160, <unk> that are helping us during the construction.
And we figure that we're going to be able to.
Attract a lot of the employees that were working on that site.
Before that we kept contact with they haven't moved from the area. So for them, it's a big advantage for coming back to <unk>.
More and more than facility so.
Where I'm really confident with what we're doing right now.
The scale also we are starting to we are as we speak progressively until Q3 next year.
So we're very positive on on being able to to find good people to run that facility.
That's great color. Thanks, just one more for me.
Tissue as workers return to the office and travel picks up.
Demand for away from home tissue, obviously will increase and Thats likely ahead of the recovery Sop P. Generation. So do you see risk of maybe a pinch and S&P demand versus supply at that point in time.
Yes. This is look again, yes, so we as I said this is going to be.
Sure.
<unk> to be in.
But obviously it will be the alternative book Virgin pulp substitute.
And saw mill, so that's going to be likely.
The answer for.
The.
The pace of between the demand.
Generation of <unk>.
A few months.
Thank you very much I'll turn it over.
Thank you.
There are no further questions at this time Mr. <unk>. Please proceed.
Thank you everyone for being on the call and looking forward to meet you on the next quarter. So have a good day everyone. Thank you.
Thank you Maximo.
Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.
Yes.
Okay.
Yes.
[music].