Mercer International Inc (MERC)
Return on equity (ROE)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income (ttm) | US$ in thousands | -242,056 | -134,816 | -42,114 | 127,564 | 247,039 | 301,537 | 303,909 | 253,952 | 170,988 | 83,489 | 21,916 | -7,910 | -17,235 | -76,979 | -83,317 | -64,647 | -9,639 | 108,091 | 148,060 | 154,556 |
| Total stockholders’ equity | US$ in thousands | 635,410 | 665,452 | 733,469 | 822,873 | 838,784 | 720,349 | 752,122 | 768,334 | 694,024 | 627,836 | 604,134 | 567,638 | 601,027 | 550,707 | 494,260 | 462,768 | 550,403 | 591,387 | 646,525 | 620,682 |
| ROE | -38.09% | -20.26% | -5.74% | 15.50% | 29.45% | 41.86% | 40.41% | 33.05% | 24.64% | 13.30% | 3.63% | -1.39% | -2.87% | -13.98% | -16.86% | -13.97% | -1.75% | 18.28% | 22.90% | 24.90% |
December 31, 2023 calculation
ROE = Net income (ttm) ÷ Total stockholders’ equity
= $-242,056K ÷ $635,410K
= -38.09%
Mercer International Inc.'s return on equity (ROE) has shown a declining trend over the past four quarters. From Q1 2022 to Q4 2023, the ROE has decreased from 33.05% to -38.09%, indicating a significant drop in profitability generated from shareholders' equity.
The ROE was relatively high in Q2 and Q3 of 2022, standing at 40.41% and 41.86% respectively, but started to decline thereafter. By Q1 2023, the ROE turned positive at 15.50%, suggesting a recovery, but the trend reversed in the subsequent quarters.
The negative ROE figures in Q3 and Q4 of 2023 (-20.26% and -38.09% respectively) reflect that the company's net income is not efficiently translating into shareholder value. This downward trend in ROE raises concerns about the company's ability to generate returns for its investors from the equity invested in the business.
It is essential for Mercer International Inc. to analyze the factors contributing to this decline in ROE and take necessary steps to improve profitability and efficiency in order to enhance shareholder value in the future.