The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Sean Stewart - TD Cowen - Analyst
: Thanks. Good morning. First question is on your deleveraging targets. Even if we have a better pulp operating environment next year versus the
challenges you had in 2024, it would still look like your free cash flow prospects are fairly modest. I guess the question is around broader deleveraging
targets and if free cash flow isn't a strong contributor, any thoughts on noncore asset sales that might be advanced to accelerate that balance sheet
transition? Any broader comments on deleveraging targets?
Question: Sean Stewart - TD Cowen - Analyst
: Rich maybe just to follow on, I mean, is, is there a target whether it's net debt to cap or net debt to ebit on a normalized environment that you guys
are, are, are are looking towards as a long term objective?
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NOVEMBER 01, 2024 / 2:00PM, MERC.OQ - Q3 2024 Mercer International Inc Earnings Call
Question: Sean Stewart - TD Cowen - Analyst
: Okay. Second question. Juan Carlos, around the US election. If Trump were to win, do you have any thoughts on the blanket import tariff that
administration would be proposing and how that might affect your strategy for European lumber shipments to the US and potentially, I guess,
Canadian pulp shipments into the US as well?
Question: Sean Stewart - TD Cowen - Analyst
: That's great context, much appreciated. That's all I have.
Question: Matthew mckellar - RBC - Analyst
: Good morning. Thanks for taking my questions with elevated interest rates weighing on construction activity, are you seeing a more competitive
environment for mass timber projects? And more broadly, what is your sense of how North American supply-demand balance in that space evolves
over the next couple of years?
Question: Matthew mckellar - RBC - Analyst
: That's great commentary. If I could just maybe follow up on that. What do you think the tipping point is in terms of rate relief? What do we really
need to see until some of those projects that have been developed but are waiting for better financing conditions to start moving forward?
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NOVEMBER 01, 2024 / 2:00PM, MERC.OQ - Q3 2024 Mercer International Inc Earnings Call
Question: Matthew mckellar - RBC - Analyst
: Okay, thanks very much. I'll turn it back.
Question: Cole Hathorn - Jefferies - Analyst
: Good morning. Thanks for taking my question. I just like to follow up on your commentary around seeing a bit of an uptick in the European lumber
markets because there's a bit of a divergence between some of the Nordic players that are calling for a bit of stability and then Stora Enso as well,
similar to you that's got probably a more similar footprint in Germany calling about an uptick in demand and pricing.
So just wanting to know, are you seeing some regional differences there and what's driving the strength is the first one.
And then the second is on the fiber costs that you're seeing. Could you give a little bit more color on regionally, what are you seeing in your kind
of feedstock to your pulp mills as well as your sawmills from a cost perspective in Europe rather than Canada, please?
Question: Cole Hathorn - Jefferies - Analyst
: Thank you. And maybe I'll just follow up on that point because the steeper cost curve that we're seeing in Europe with UPM Meta Fibre taking
downtime due to those fiber costs and your, like, relatively better cost position mills in softwood, are you really seeing that benefit?
And with the commercial downtime that your competitors have taken recently, are you seeing kind of increased incomings, better order books
because of your relative cost position and people are bit nervous or not really at that stage, am I reading in too much to that?
Question: CJ Baldoni - - Analyst
: Hello. Thank you for taking my question. I'm just wondering what the implications might be to the extent that there's a strike in the BC port. It looks
like a 72-hour strike notice was given by some of the longshoremen there.
Question: CJ Baldoni - - Analyst
: Great. Okay. Thank, thank you. That's all that I.
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