Moving Forward with Long-Term Strategic Initiatives
MISSISSAUGA, Ontario, Nov. 08, 2018 -- KP Tissue Inc. (KPT) (TSX: KPT) reports the Q3 2018 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 15.8% interest in KPLP.
KPLP Q3 2018 Business and Financial Highlights
- Revenue increased by 3.6% to $348.4 million in Q3 2018 compared to Q3 2017
- Adjusted EBITDA was $28.3 million in Q3 2018 compared to $39.4 million in Q3 2017
- Pulp and freight costs continued to escalate in the quarter
- Announced plans to invest $575 million to build a second TAD paper machine and state-of-the-art plant
- Declared a quarterly dividend of $0.18 per share to be paid on January 15, 2019
"Our results for the third quarter reflect continued negative impact from high pulp prices and freight costs. Despite this difficult cost environment in 2018, we are undertaking several key initiatives that will strengthen our business over the longer term, and reinforce our leadership position in the market," said Dino Bianco, CEO of KP Tissue and KPLP.
"The recent selling price increase announced in our Canadian consumer business will take effect in the fourth quarter and is expected to fully materialize in the first quarter of 2019. Our decision during the quarter to proceed with the $575 millionTAD2 Project is central to our long-term North American growth strategy in the ultra-premium paper tissue segment. We also have further plans to optimize our operational network.
"We are confident that we have the right vision and strategy to move the Company forward and create increased value for our shareholders," concluded Mr. Bianco.
KPLP continues to have strong long-term business fundamentals. However, due to continued pressure from high input costs Q4 2018 Adjusted EBITDA is expected to be significantly lower than Q4 2017 which was $33.7 million.
Source: KP Tissue