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KP Tissue releases second-quarter results

August 9, 2018 – KP Tissue (KPT) has announced the second-quarter results of KPT and Kruger Products (KPLP). KPT currently holds a 15.9 per cent interest in KPLP.

For KPLP, highlights include increased revenue of 7.8 per cent to $338.8 million over Q2 2017, primarily due to increased sales volume and the consumer selling price increase in Canada in Q4 2017. Adjusted EBITDA was $26.7 million compared to $37.3 million in Q2 2017. The company declared a quarterly dividend of $0.18 per share to be paid on October 15, 2018. Pulp and freight costs continued to escalate in the quarter.

“We are pleased to report strong sales and volume growth for the quarter as we continue to maintain our market leadership position,” said Dino Bianco, CEO of KP Tissue and KPLP. “Considering the significant negative impact of record-high pulp prices and freight costs on our results, we announced a price increase in the Canadian consumer business to take effect in mid-October. This increase is expected to provide a small benefit in our fourth quarter-results and mainly impact 2019.” 

Bianco continued, “During the second quarter, we made further progress on our value creation program, which, when combined with our recent capital projects, partially offset higher input costs. We do not expect changes in these challenging market conditions in the short-term and, consequently, anticipate third quarter Adjusted EBITDA to be lower than the same prior year period and also to reflect normal seasonality.”

Meanwhile, KPT incurred a net loss of $1.3 million in Q2 2018. Included in the net loss was $0.3 million representing KPT’s share of KPLP’s income. The income was reduced by depreciation expense of $1.5 million related to adjustments to carrying amounts on acquisition, partially offset by an income tax expense of $0.2 million.

Read the full report here.