KP Tissue Releases Third Quarter 2021 Financial Results
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KP Tissue Inc. (KPT) (TSX: KPT) reports the Q3 2021 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 (AFH) 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 14.5% interest in KPLP.
KPLP Q3 2021 Business and Financial Highlights
• Revenue increased by $22.3 million or 6.0% to $391.4 million in Q3 2021 compared to $369.1 million in Q3 2020.
• Adjusted EBITDA was $40.3 million in Q3 2021 compared to $46.2 million in Q3 2020, a decrease of 12.8%, and improved sequentially from $37.3 million in Q2 2021.
• TAD Sherbrooke continues to run above the expected start-up curve.
• Declared a quarterly dividend of $0.18 per share to be paid on January 17, 2022
"Our solid revenue growth of 6% 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," stated KP Tissue's Chief Executive Officer, Dino Bianco.
"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% and facial tissue increased by 4.0 share points to 35.5%. 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% 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% year-over-year revenue growth supported in part by the faster re-opening 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," concluded Mr. Bianco.
