Financial Reports & Markets
KP Tissue reports third quarter results; indicates movement towards pre-pandemic levels
November 16, 2021 By P&PC Staff/KP Tissue
KP Tissue recently reported its financial and operational results for the third quarter of the year for KPT and Kruger Products L.P. (KPLP).
The results show that its revenue increased by $22.3 million or six percent to $391.4 million in the third quarter of 2021 compared to $369.1 million at the same time last year. Adjusted EBITDA was $40.3 million this quarter compared to $46.2 million in the third quarter of 2020, a decrease of 12.8 percent, and improved sequentially from $37.3 million in the second quarter of 2021. TAD Sherbrooke continues to run above the expected start-up curve. The company declared a quarterly dividend of $0.18 per share to be paid on Jan. 17, 2022.
Dino Bianco, CEO of KP Tissue stated in the report, “Our solid revenue growth of six percent for the third quarter reflects pricing actions in our Canadian consumer segment, combined with slightly higher volume and gradually improving commercial end-markets, along with the execution of our recovery plan in the Away-From-Home business. High inflationary costs and near-record pulp prices negatively impacted our adjusted EBITDA compared to the same quarter last year, but the benefits of recent price increases resulted in a sequential improvement to $40.3 million for the quarter.
Market share data in Canada for the most recent 52-week period further highlights the significant progress we have made since the beginning of 2020. In our market-leading categories we have grown bathroom tissue by 2.4 share points to 35.6 percent and facial tissue increased by 4 share points to 35.5 percent. In the paper towel category, we consolidated our strong second place through innovations and the introduction of new products, translating into gains of 2.6 share points to 23.2 percent with continued strong investments ahead.
The Away-From-Home segment, which was hardest hit by the COVID-19 pandemic, showed further signs of recovery in the quarter with 20 percent year-over-year revenue growth supported in part by the faster reopening of the U.S. economy. On the strength of higher sales volumes, more in-house paper production and cost-reduction initiatives, adjusted EBITDA for this business turned positive in Q3 2021.
Inflationary pressure and labour shortages are among the key challenges we will be facing in upcoming quarters. We are executing pricing actions across the business along with a more focused labour approach to manage our margins, while continuing to invest to grow the top-line in both Consumer and AFH. TAD Sherbrooke performance continues to be well ahead of our growth curve and a key enabler for future growth.”
The company noted in its report that it is seeing activities and behaviour beginning to return to more pre-COVID levels in both the consumer and away-from-home segments. Cost inflation and lagged pricing in the fourth quarter might however impact results. The company expects the quarter four adjusted EBITDA to be lower than this quarter but higher than the fourth quarter of 2020.
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