KP Tissue releases Q3 2018 results for Kruger Products
By P&PC Staff
By P&PC Staff
November 8, 2018 – KP Tissue Inc. (KPT) has announced the third-quarter financial and operational results for KPT and Kruger Products L.P. (KPLP). KPT currently holds a 15.8 per cent interest in KPLP.
KPT incurred a net loss of $0.8 million in Q3 2018. Included in the net loss was $0.7 million representing KPT’s share of KPLP’s income. The income was reduced by a depreciation expense of $1.4 million related to adjustments to carrying amounts on acquisition, partially offset by an income tax expense of $0.1 million.
Meanwhile, KPLP noted increased revenue of 3.6 per cent to $348.4 million in Q3 2018 compared to Q3 2017, with adjusted EBITDA of $28.3 million in Q3 2018 compared to $39.4 million in Q3 2017. The company declared a quarterly dividend of $0.18 per share to be paid on January 15, 2019.
Pulp and freight costs continued to escalate in the quarter.
“Our results for the third quarter reflect continued negative impact from high pulp prices and freight costs,” says Dino Bianco, CEO of KP Tissue and KPLP. “Despite this difficult cost environment in 2018, we are undertaking several key initiatives that will strengthen our business over the longer term, and reinforce our leadership position in the market.”
“The recent selling price increase announced in our Canadian consumer business will take effect in the fourth quarter and is expected to fully materialize in the first quarter of 2019. Our decision during the quarter to proceed with the $575 million TAD2 Project is central to our long-term North American growth strategy in the ultra-premium paper tissue segment. We also have further plans to optimize our operational network. We are confident that we have the right vision and strategy to move the Company forward and create increased value for our shareholders.
On August 16, 2018, KPLP announced its plan for a capital investment of $575 million in the Brompton area of Sherbrooke, Quebec, to build a new, state-of-the art tissue plant featuring Canada’s largest and most modern TAD paper machine (TAD2) along with related converting equipment and infrastructure (the TAD2 Project). The TAD2 Project is projected to produce at maturity approximately 70,000 metric tonnes per annum of bathroom tissue and paper towels.Construction of the TAD2 Project is anticipated to begin in early 2019 and commence production in early 2021.
Read the full report here.