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KP Tissue reports Q4 and full-year financial results for 2023

KP Tissue has released its the Q4 2023 and full year 2023 financial and operational results of KPT and Kruger Products.

Kruger Products Q4 2023 highlights

• Revenue was $482.3 million in Q4 2023 compared to $458.1 million in Q4 2022, an increase of $24.2 million or 5.3 percent.
• Adjusted EBITDA was $61.2 million in Q4 2023, compared to $44.4 million in Q4 2022, an increase of 37.9 percent.
• Net income was $16.5 million in Q4 2023 compared to $16.0 million in Q4 2022, an increase of $0.5 million.
• Declared a quarterly dividend of $0.18 per share to be paid on April 15, 2024.
• Facial tissue line in the Sherbrooke Expansion Project started up successfully in February 2024.
• Announced a 25 percent increase in facial production at the Gatineau plant on March 5, 2024 with a $14.5 million investment.

Kruger Products full year 2023 highlights

• Revenue was $1,873 million in Fiscal 2023 compared to $1,681.4 million in Fiscal 2022, an increase of $191.6 million or 11.4 percent.
• Adjusted EBITDA was $238.6 million in Fiscal 2023, compared to $116 million in Fiscal 2022, an increase of 105.7 percent.
• Net loss was $5.3 million in Fiscal 2023 compared to $56.9 million in Fiscal 2022, a decrease in the loss of $51.6 million.

“We are pleased with our financial results in fiscal 2023, highlighted by record sales of $1.9 billion and record Adjusted EBITDA of $238.6 million driven by many positive factors,” stated KP Tissue’s CEO Dino Bianco. “Overall, our business benefited from robust volume, positive margin management with continued volatile costs, and strong operational efficiency across our network.”

“In our Consumer segment, we gained market share within the facial tissue and paper towel categories, while improving our share trend on bathroom tissue. We also stepped up to support and supply our Scotties facial tissue to customers and consumers given the exit of Kleenex from the Canadian grocery market. Our Away-From-Home business continued to deliver sustainable results with another strong Adjusted EBITDA quarter and year.”

“In the fourth quarter, our underlying results remained solid with Adjusted EBITDA growing 37.9 percent year-over-year to $61.2 million, despite strategically increasing investments in marketing and maintenance to enable us to enter 2024 in a stronger competitive position. Looking ahead, we plan to manage our margins amid rising costs, continue to invest in our brands, grow our facial tissue position, and implement a successful start-up of our Sherbrooke Expansion,” Bianco concluded.

Kruger products Q4 2023 results

Revenue was $482.3 million in Q4 2023 compared to $458.1 million in Q4 2022, an increase of $24.2 million or 5.3 percent. The increase in revenue was primarily due to higher sales volume, partially offset by increased promotional spending compared to the prior year quarter.

Cost of sales was $400.5 million in Q4 2023 compared to $416.4 million in Q4 2022, a decrease of $15.9 million or 3.8 percent. Manufacturing costs decreased due primarily to lower pulp and other input costs resulting from moderating inflation and productivity improvements in plant operations, which were only partially offset by higher volume. Freight costs were lower compared to Q4 2022 as supply constraints and inflation moderated, while warehousing costs increased as a result of additional logistics network costs. As a percentage of revenue, cost of sales was 83 percent in Q4 2023 compared to 90.9 percent in Q4 2022.

Selling, general and administrative (SG&A) expenses were $50.3 million in Q4 2023 compared to $30.6 million in Q4 2022, an increase of $19.7 million or 64.4 percent. The increase was primarily due to significantly higher advertising and IT spend in the quarter, higher personnel and selling expenses to support additional sales volume, and a loss on disposal of fixed assets. As a percentage of revenue, SG&A expenses were 10.4 percent in Q4 2023 compared to 6.7 percent in Q4 2022.

Adjusted EBITDA was $61.2 million in Q4 2023 compared to $44.4 million in Q4 2022, an increase of $16.8 million or 37.9 percent. The significant increase was primarily due to higher sales volume, lower pulp and other input costs, productivity improvements in plant operations and lower freight costs, partially offset by slightly lower selling prices, higher warehousing and SG&A expenses.

Net income was $16.5 million in Q4 2023 compared to $16.0 million in Q4 2022, an increase of $0.5 million. The increase was primarily due to higher Adjusted EBITDA, lower depreciation expense and restructuring costs related primarily to the shutdown of certain Memphis plant production assets in Q4 2022, higher foreign exchange gains and lower interest expense, partially offset by the change in the amortized cost of Partnership Units Liability in Q4 2022, a loss on sale of fixed assets, higher income tax expense and a loss from non-controlling interest.

2023 financial results

Revenue was $1,87o million in Fiscal 2023 compared to $1,681.4 million in Fiscal 2022, an increase of $191.6 million or 11.4 percent. The increase in revenue was primarily due to higher sales volume along with the favourable impact of selling price increases implemented across all segments and regions during Fiscal 2022. Revenue was also favourably impacted by foreign exchange fluctuations on U.S. dollar sales.

Adjusted EBITDA1 was $238.6 million in Fiscal 2023 compared to $116.0 million in Fiscal 2022, an increase of $122.6 million or 105.7 percent. The significant increase was primarily due to the favourable impact of selling price increases implemented in Fiscal 2022 along with higher sales volume, lower pulp prices, improvements in Memphis operations and lower freight costs, partially offset by other input cost inflation compared to Fiscal 2022, higher manufacturing overhead spending, and higher warehousing and SG&A expenses along with the unfavourable impact of foreign exchange fluctuations.

Net loss was $5.3 million in Fiscal 2023 compared to $56.9 million in Fiscal 2022, a decrease in the loss of $51.6 million. The decrease in the loss was primarily due to higher Adjusted EBITDA, a lower foreign exchange loss, lower interest and depreciation expenses and lower consulting and restructuring costs, partially offset by higher income tax expense, the change in the amortized cost of Partnership Units Liability in Fiscal 2022, a loss on sale of fixed assets and a loss from non-controlling interest.