Sequential results improving
Mississauga (ON), August 8, 2019 - KP Tissue Inc. (KPT) (TSX: KPT) reports the Q2 2019 financial and operational results of KPT and Kruger Products L.P. (KPLP).
Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere, Purex, SpongeTowels, Scotties, and White Swan) and the Away-From-Home market, and continues to grow in the U.S. Consumer tissue business with the White Cloud® brand and premium private label products. KPT currently holds a 15.4% interest in KPLP.
KPLP Q2 2019 Business and Financial Highlights
- Revenue increased by 7.9% to $365.7 million in Q2 2019 compared to Q2 2018
- Adjusted EBITDA increased sequentially to $31.5 million from $23.6 million in Q1 2019, or 33.5%, and increased by $0.9 million from $30.6 million in Q2 2018
- Pulp costs moderated and were similar to the prior year quarter TAD Sherbrooke Project progressing on time and on budget
- Declared a quarterly dividend of $0.18 per share to be paid on October 15, 2019
“We had a solid second quarter with significant progress over the first quarter in both the Consumer and Away-from-Home segments. The benefits of our Operational Excellence program started to take effect and there was a year-over-year benefit from our pricing actions. We are encouraged by the sequential improvement in the performance of our Away-from-Home business as the initiatives we have put in place are starting to create a positive impact,” indicated Dino Bianco, KP Tissue CEO. “The TAD Sherbrooke project is progressing according to plan, on-time and on-budget. With our Operational Excellence program, we are improving operating efficiencies and creating a common culture for developing standard approaches across the supply chain. As for our trademark products, we are committed to enhancing our leadership position in Canada and will intensify our marketing programs and innovations going forward.
Looking ahead, we anticipate a stabilization of input costs and incremental benefits from the Operational Excellence initiatives as we continue to invest in the business to reinforce our long-term position,” concluded Mr. Bianco.
KPLP will continue to benefit from the Consumer Canada price increase implemented in Q4 2018, along with the Consumer US and Away-From-Home price increases announced in 2019. These price increases combined with cost reduction initiatives and more moderate input costs are expected to more than offset the unfavourable impacts of foreign exchange fluctuations and capacity related challenges. For Q3 2019, Adjusted EBITDA is forecast to show improvement compared to both Q2 2019 and Q3 2018.
Source: KP Tissue
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