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Overall, per unit fiber costs for our pulp segment were flat in the fourth quarter of 2024 compared to the third quarter of 2024. Per unit fiber costs for our solid wood segment increased due to stable demand and tight supply. In the first quarter of 2025, we currently expect per unit fiber costs to be generally stable at our pulp mills. For our sawmills, we currently expect per unit fiber costs to increase due to continued tight supply.

We are currently planning for a total of 21 days of planned maintenance downtime at our Celgar mill in the first quarter of 2025.

In our solid wood segment, our mass timber business successfully completed two large-scale projects in the U.S. The current high-interest rate environment in Europe and North America continues to have an impact on our solid wood segment, putting downward pressure on both short-term growth and demand for this segment's products. However, we continue to believe that we are well positioned to capitalize on more opportunities as cyclical conditions start to improve."

Mr. Bueno concluded: "Our operating results this year improved significantly compared to the prior year, driven by stronger pulp markets, lower costs and the growth of our mass timber business. We finished 2024 with approximately $488.6 million in aggregate liquidity and reduced our long-term debt by over $100 million in the fourth quarter using cash on hand. This focus on debt reduction will remain a key goal as we move forward in this improved market environment."

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^{*Operating EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States ("GAAP") and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. See page 6 of the financial tables included in this press release for a reconciliation of net income (loss) to Operating EBITDA.}

Consolidated Financial Results

Consolidated – Three Months Ended December 31, 2024 Compared to Three Months Ended December 31, 2023

Total revenues for the fourth quarter of 2024 increased by approximately 4% to $488.4 million from $470.5 million in the same quarter of 2023 primarily due to higher pulp sales realizations partially offset by lower pulp sales volumes.

Costs and expenses in the fourth quarter of 2024 decreased by approximately 17% to $438.0 million from $526.9 million in the same quarter of 2023 driven by lower pulp sales volumes, foreign exchange gains mainly on dollar denominated accounts receivables held at our operations as the dollar strengthened relative to the euro and Canadian dollar at the end of 2024 and lower maintenance costs due to no days of planned maintenance downtime at our pulp mills in the fourth quarter of 2024 compared to 23 days in the fourth quarter of 2023. In the fourth quarter of 2023, we recognized a $33.7 million non-cash impairment in connection with the classification of our sandalwood business as held for sale.

In the fourth quarter of 2024, Operating EBITDA increased to $99.2 million from $21.1 million in the same quarter of 2023 primarily due to higher pulp sales realizations, the positive impact of a stronger dollar and no planned days of maintenance downtime at our pulp mills in the fourth quarter of 2024.

Segment Results

Pulp

In the fourth quarter of 2024, Segment Operating EBITDA increased to $106.1 million from $32.0 million in the same quarter of 2023 primarily due to higher pulp sales realizations, foreign exchange gains mainly on dollar denominated accounts receivables held at our operations as the dollar strengthened relative to the euro and Canadian dollar at the end of 2024 and no days of planned maintenance downtime at our pulp mills in the fourth quarter of 2024 compared to 23 days in the fourth quarter of 2023.

Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the fourth quarter of 2024 increased by approximately 3% to $375.5 million from $364.2 million in the same quarter of 2023 primarily due to higher pulp revenues.

Pulp revenues in the fourth quarter of 2024 modestly increased to $351.2 million from $340.7 million in the same quarter of 2023 as a result of higher sales realizations partially offset by lower sales volumes.

In the fourth quarter of 2024, third-party industry quoted average list prices for NBSK pulp increased in both Europe and North America from the same quarter of 2023. Third-party industry quoted average net prices for NBSK pulp in China also increased from the same quarter of 2023. Our average NBSK pulp sales realizations in the fourth quarter of 2024 increased by approximately 12% to $794 per ADMT from $709 per ADMT in the same quarter of 2023. In the fourth quarter of 2024, average NBHK pulp sales realizations modestly decreased to $578 per ADMT from $593 per ADMT in the same quarter of 2023.

Total pulp sales volumes in the fourth quarter of 2024 decreased by approximately 8% to 451,914 ADMTs from 491,156 ADMTs in the same quarter of 2023 primarily due to lower production.

Energy and chemical revenues in the fourth quarter of 2024 were relatively flat at $24.3 million compared to $23.5 million in the same quarter of 2023.

Costs and expenses in the fourth quarter of 2024 decreased by approximately 16% to $306.9 million from $363.2 million in the same quarter of 2023 primarily due to lower pulp sales volumes, the positive foreign exchange impact of a stronger dollar and lower maintenance costs due to no days of planned downtime at our pulp mills in the fourth quarter of 2024 compared to 23 days in the fourth quarter of 2023.

Total pulp production in the fourth quarter of 2024 decreased by approximately 8% to 466,635 ADMTs compared with 507,670 ADMTs in the same quarter of 2023 primarily as a result of the dissolution of the Cariboo Pulp & Paper Company ("CPP") joint venture in the first quarter of 2024 and unplanned downtime at our Canadian mills partially offset by fewer days of planned maintenance downtime.

On average, in the fourth quarter of 2024, overall per unit fiber costs decreased by approximately 5% compared to the same quarter of 2023 due to stable supply at all our mills. In the first quarter of 2025, we currently expect per unit fiber costs to increase in Germany due to tight supply offset by modestly lower per unit fiber costs in Canada.

Solid Wood

In the fourth quarter of 2024, Segment Operating EBITDA was relatively flat at negative $4.7 million compared to negative $5.6 million in the same quarter of 2023.

Solid wood segment revenues in the fourth quarter of 2024 increased by approximately 6% to $111.6 million from $105.4 million in the same quarter of 2023 primarily due to higher lumber and biofuels revenues partially offset by lower revenues from our other products.

Lumber revenues in the fourth quarter of 2024 increased by approximately 23% to $58.6 million from $47.8 million in the same quarter of 2023 primarily as a result of higher sales realizations and sales volumes. Average lumber sales realizations in the fourth quarter of 2024 increased to $474 per Mfbm from $427 per Mfbm in the same quarter of 2023 driven by an increase in demand in both the U.S and European markets. The U.S. market accounted for approximately 45% of our lumber revenues and approximately 38% of our lumber sales volumes in the fourth quarter of 2024. Most of the balance of our lumber sales were in Europe.

Lumber sales volumes in the fourth quarter of 2024 increased by approximately 10% to 123.6 MMfbm from 112.0 MMfbm in the same quarter of 2023 due to timing of sales.

Manufactured products revenues in the fourth quarter of 2024 decreased by approximately 22% to $12.7 million from $16.3 million in the same quarter of 2023 primarily due to lower sales volumes as we completed our major mass timber projects in the third quarter of 2024.

Lumber production in the fourth quarter of 2024 was relatively stable at 114.7 MMfbm compared to 111.6 MMfbm in the same quarter of 2023.

Fiber costs were approximately 75% of our lumber cash production costs in the fourth quarter of 2024. In the fourth quarter of 2024, per unit fiber costs for lumber increased by approximately 18% compared to the same quarter of 2023 primarily due to stable demand and tight supply. In the first quarter of 2025, we currently expect per unit fiber costs to increase due to continued tight supply.

Consolidated – Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Total revenues in 2024 modestly increased to $2,043.4 million from $1,993.8 million in 2023 as higher pulp, manufactured products and lumber sales realizations were offset by lower sales realizations from our other products and lower pulp and lumber sales volumes.

Costs and expenses in 2024 decreased by approximately 7% to $2,028.4 million from $2,182.6 million in 2023 primarily as a result of lower per unit production costs due to the easing of inflationary pressure and cost reduction initiatives, lower sales volumes and foreign exchange gains mainly on dollar denominated accounts receivables held at our operations as the dollar strengthened relative to the euro and Canadian dollar at the end of 2024. In 2024, costs and expenses included a non-cash loss of $23.6 million recognized in connection with the dissolution of the CPP joint venture and a non-cash goodwill impairment of $34.3 million related to the Torgau facility, which was recognized as a result of ongoing weakness in lumber, pallet and biofuels markets in Europe stemming from high interest rates and other economic conditions. We have achieved some of the planned synergies from the Torgau acquisition and expect to achieve further synergies as market and economic conditions improve. In 2023, we received insurance proceeds of $46.4 million relating to the 2021 turbine downtime at the Rosenthal mill and the 2022 fire at the Stendal mill and we recognized a $33.7 million non-cash impairment in connection with the classification of our sandalwood business as held for sale.

In 2024, Operating EBITDA increased to $243.7 million from $17.5 million in 2023 primarily due to higher pulp, manufactured products and lumber sales realizations, lower per unit fiber and other production costs and the positive foreign exchange impact of a stronger dollar. These increases were partially offset by lower sales realizations from our other products. In 2023, we received insurance proceeds of $46.4 million relating to the 2021 turbine downtime at the Rosenthal mill and the 2022 fire at the Stendal mill.

Liquidity

As of December 31, 2024, we had cash and cash equivalents of $184.9 million, approximately $303.7 million available under our revolving credit facilities and aggregate liquidity of about $488.6 million.

The following table is a summary of selected financial information as of the dates indicated:

Quarterly Dividend

A quarterly dividend of $0.075 per share will be paid on April 2, 2025 to all shareholders of record on March 26, 2025. Future dividends will be subject to Board approval and may be adjusted as business and industry conditions warrant.

Earnings Release Call

In conjunction with this release, Mercer International Inc. will host a conference call, which will be simultaneously broadcast live over the Internet. Management will host the call, which is scheduled for February 21, 2025 at 10:00 AM ET. Listeners can access the conference call live and archived for 30 days over the Internet at https://edge.media-server.com/mmc/p/88s2i4a9 or through a link on the company's home page at https://www.mercerint.com. Please allow 15 minutes prior to the call to visit the website and download and install any necessary audio software.

Mercer International Inc. is a global forest products company with operations in Germany, USA and Canada with consolidated annual production capacity of 2.1 million tonnes of pulp, 960 million board feet of lumber, 210 thousand cubic meters of CLT, 45 thousand cubic meters of glulam, 17 million pallets and 230 thousand tonnes of biofuels. To obtain further information on the company, please visit its website at https://www.mercerint.com.

The preceding includes forward-looking statements which involve known and unknown risks and uncertainties which may cause our actual results in future periods to differ materially from forecasted results. Words such as "expects", "anticipates", "are optimistic that", "projects", "intends", "designed", "will", "believes", "estimates", "may", "could" and variations of such words and similar expressions are intended to identify such forward-looking statements. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of our business, raw material costs, our level of indebtedness, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.

APPROVED BY:
William D. McCartney
Chairman
(604) 684-1099

Juan Carlos Bueno
Chief Executive Officer
(604) 684-1099

-FINANCIAL TABLES FOLLOW-

Summary Financial Highlights

Summary Operating Highlights

MERCER INTERNATIONAL INC.
COMPUTATION OF OPERATING EBITDA
(Unaudited)
(In thousands)

Operating EBITDA is defined as operating income (loss) plus depreciation and amortization and long-lived asset impairment charges. Management uses Operating EBITDA as a benchmark measurement of its own operating results, and as a benchmark relative to its competitors. Management considers it to be a meaningful supplement to operating income (loss) as a performance measure primarily because depreciation expense and long-lived asset impairment charges are not actual cash costs, and depreciation expense varies widely from company to company in a manner that management considers largely independent of the underlying cost efficiency of our operating facilities. In addition, management believes Operating EBITDA is commonly used by securities analysts, investors and other interested parties to evaluate our financial performance.

Operating EBITDA does not reflect the impact of a number of items that affect our net income (loss), including financing costs, income taxes and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income (loss) or operating income (loss) as a measure of performance, nor as an alternative to net cash from (used in) operating activities as a measure of liquidity. Operating EBITDA is an internal measure and therefore may not be comparable to other companies.

Operating EBITDA is a non-GAAP financial measure at the consolidated level and is considered different from Operating EBITDA at the segment level, referred to as “Segment Operating EBITDA”, which is our single measure of segment profit or loss presented in our financial statements under GAAP. For more information on Segment Operating EBITDA, refer to the segment information note within our consolidated financial statements.

The following table sets forth a reconciliation of net income (loss) to Operating EBITDA for the periods indicated: