KP Tissue Releases Second Quarter 2023 Financial Results
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KP Tissue Inc. (KPT) (TSX: KPT) reports the Q2 2023 financial and operational results of KPT and Kruger Products Inc. (Kruger Products). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and BonterraTM) and the Away-From-Home (AFH) market and continues to grow in the U.S. Consumer tissue business with the White Cloud® brand and premium private label products. KPT currently holds a 13.3% interest in Kruger Products.
Kruger Products Q2 2023 Business and Financial Highlights
• Revenue was $466.3 million in Q2 2023 compared to $397.5 million in Q2 2022, an increase of $68.8 million or 17.3%.
• Adjusted EBITDA1 was $55.0 million in Q2 2023, compared to $11.8 million in Q2 2022, an increase of 365.8%.
• Net income was $14.5 million in Q2 2023 compared to a net loss of $35.5 million in Q2 2022, an increase of $50.0 million.
• Declared a quarterly dividend of $0.18 per share to be paid on October 16, 2023.
“We are pleased that margin recovery, along with improved sales volume and a better mix in our Consumer business, generated strong Adjusted EBITDA of $55.0 million in the second quarter of 2023,” stated KP Tissue’s Chief Executive Officer, Dino Bianco. “Ongoing cost management initiatives, including productivity gains and cost controls, also contributed to increasing profitability. In addition, our Away-From-Home segment delivered a fourth consecutive quarter of positive Adjusted EBITDA to maintain its growth momentum. As a result, our financial performance in the second quarter normalized versus a more challenging market and operating environment in the same period last year. On a sequential basis, revenue and Adjusted EBITDA continued to improve, rising 3.4% and 10.2% in the quarter, respectively.”
“Looking ahead to the second half of 2023, we anticipate a more favourable landscape as input costs trend downwards, TAD Sherbrooke and the Sherbrooke Expansion Project continue to ramp up production capacity to meet customer demand, and margins are restored to their pre-pandemic levels,” Mr. Bianco added.
Outlook for Q3 2023
For the third quarter of 2023, as commodity and other input costs begin to decline, we will focus on maintaining our margins while also continuing to reinvest in the business to drive long-term value. Accordingly, Adjusted EBITDA1 in Q3 2023 is expected to be in the range of Q2 2023.
