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Kruger Products sees revenue dip in Q1 2021 as tissue demand evens out


May 7, 2021
By P&PC Staff/KP Tissue

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KP Tissue (KPT) has released the Q1 2021 results for KPT and Kruger Products L.P. (KPLP), citing a revenue dip of 17.3 per cent compared to the year-ago period for KPLP.

KPT currently holds a 14.6 per cent interest in KPLP.

Revenue decreased by $64.7 million or 17.3 per cent to $310.4 million in Q1 2021 compared to $375.1 million in Q1 2020.

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Adjusted EBITDA was $37.5 million in Q1 2021, compared to $51 million in Q1 2020, a decrease of 26.5 per cent, and compared to $36.2 million in Q4 2020, an increase of 3.5 per cent.

“Last year, we reported exceptional first-quarter results driven by unprecedented consumer demand related to COVID-19. During the first quarter of this year, we observed a reversal of the situation with retailers and consumers de-stocking as supply concerns subsided,” says Dino Bianco, chief executive officer, Dino Bianco.

“The AFH (away-from-home) segment continued to face strong headwinds from government restrictions. In these circumstances, revenues and adjusted EBITDA for the quarter declined by 17.3 per cent and 26.5 per cent, respectively.”

TAD Sherbrooke start-up was successful in Q1 and is running above the ramp-up curve with the introduction of SpongeTowels Ultra Pro premium paper towel.

“To counter the exceptional and rapid rise in pulp prices, at the beginning of April we announced a price increase for consumer-branded and private-label products sold in Canada to be effective in early July,” Bianco says.

“At this stage, we anticipate consumer demand to start stabilizing in the second quarter with a return to more normal buying patterns. While U.S. market conditions for the AFH segment are gradually improving, the Canadian AFH market will remain challenging with ongoing restrictions. More favourable market conditions combined with pricing actions should translate into a stronger performance in the second half of 2021.”

Read the full Q1 2021 financial report from KP Tissue and Kruger Products here.