KP Tissue reported positive performance in the second quarter of 2026, with higher revenue and a significant improvement in adjusted EBITDA at Kruger Products, its main investment. The company released its results on August 13, covering the period ended June 30, 2026.
Kruger Products, a Canadian manufacturer of tissue products for the consumer and Away-From-Home (AFH) markets, reported revenue of CAD 550.9 million in the second quarter, compared with CAD 536.1 million in the same period of 2025. This represents a 2.8% year-over-year increase.
The growth was mainly driven by higher sales volumes in the U.S. consumer business and the AFH segment, partially offset by lower consumer volumes in Canada.
ADJUSTED EBITDA INCREASES 25%
One of the main highlights of the quarter was the increase in adjusted EBITDA, which reached CAD 90.6 million, compared with CAD 72.5 million in the second quarter of 2025. The result represents a 25% year-over-year increase.
According to the company, the improvement was primarily driven by better performance at its Memphis facility, higher sales volumes and favorable pulp costs. These factors were partially offset by higher freight rates and increased selling, general and administrative expenses.
Cost of sales decreased to CAD 440.1 million from CAD 462.2 million a year earlier, representing a 4.8% reduction. The company attributed the decrease mainly to lower pulp costs and improved mill performance at its Memphis facility.
CANADIAN MARKET REMAINS UNDER PRESSURE
Despite the overall improvement in results, Kruger Products expects continued pressure in the Canadian market during the second half of the year.
The company said it anticipates ongoing market softness in Canada, as some consumers are shifting toward private-label products in response to inflationary pressures. In response, Kruger Products has implemented a market-share recovery plan for the second half of 2026.
In contrast, the U.S. business contributed positively to quarterly growth. Revenue in the United States increased 9.5% year over year to CAD 259.0 million, while revenue in Canada declined 2.6% to CAD 291.9 million.
PROGRESS ON NEW TAD FACILITY IN THE UNITED STATES
Kruger Products also reported progress on its long-term expansion plans. The company said it is moving forward with efforts to secure a preferred location for a new Through Air Drying (TAD) facility in the western United States.
The project forms part of the company’s strategy to expand its presence in the U.S. market. However, the company noted that the plans remain subject to a number of risks and uncertainties.
For the third quarter of 2026, Kruger Products expects adjusted EBITDA to remain around the level recorded in the second quarter.
FIRST-HALF RESULTS
During the first six months of 2026, Kruger Products generated revenue of CAD 1.0955 billion, compared with CAD 1.0822 billion in the same period of 2025.
Adjusted EBITDA reached CAD 177.5 million, up from CAD 148.2 million in the first half of the previous year, representing a 19.8% increase. Net income attributable to Kruger Products reached CAD 41.9 million, compared with CAD 37.5 million in the first half of 2025.
KP Tissue, which holds a 12% interest in Kruger Products, reported net income of CAD 2.5 million for the second quarter. Its board also declared a quarterly dividend of CAD 0.21 per common share, payable on October 15, 2026.
