KP Tissue and Kruger Products release fourth quarter and full year 2024 financial results

KP Tissue and Kruger Products have released their financial results for the fourth quarter and full year 2024, highlighting a series of achievements and challenges. Kruger Products, a leading Canadian manufacturer of tissue products for the consumer and Away-From-Home (AFH) markets, achieved a significant 11.9% increase in revenue in the fourth quarter of 2024, totaling US$539.6 million, compared to the US$482.3 million recorded in the same period of 2023. This growth was mainly driven by the increase in sales volume in the United States and the positive impact of currency fluctuations, as well as favorable prices in both Canada and the US.

However, Kruger Products was unable to maintain the positive trajectory of net income, which fell to a loss of US$13.7 million in the fourth quarter of 2024, compared to a profit of US$16.5 million in the fourth quarter of 2023. The drop in net income was attributed to a few factors, including a significant increase in depreciation and interest expenses, as well as higher foreign exchange losses, which were partially offset by growth in adjusted EBITDA, which registered US$66.8 million in the fourth quarter, up 9.2% compared to the same period in 2023.

In year-on-year terms, Kruger Products recorded a 9.4% growth in revenue, totaling US$2,049.9 million in fiscal year 2024, compared to US$1,873.0 million in 2023. This increase was driven by both growth in sales volume and the positive impact of exchange rate fluctuations. The company’s adjusted EBITDA also grew by 11% to US$264.8 million, driven by higher sales volumes, more favorable prices and a favorable sales mix. Kruger Products’ net profit, which had been negative in 2023, rose to US$23.8 million in 2024, a significant improvement of US$29.1 million.

In the case of KP Tissue, which holds a 12.5% stake in Kruger Products, the impact of Kruger’s financial performance was reflected in its own results. KP Tissue recorded a net loss of US$2 million in the fourth quarter of 2024, mainly due to the US$1.8 million share of Kruger Products’ losses, in addition to other accounting adjustments related to the acquisition. However, in fiscal year 2024, KP Tissue recorded a net profit of US$2.4 million, with a gain of US$3.0 million from its share of Kruger Products’ net profit. The company also recorded a dilution gain of US$0.6 million, which contributed to the positive result for the year.

In relation to financing activities, Kruger Products issued US$135 million in senior unsecured notes due 2031 at the beginning of November 2024. The funds obtained were mainly used to redeem US$125 million in previously issued senior notes, as well as for other business needs. In terms of liquidity, the company ended the year with US$344.6 million in cash and available, which includes US$16.6 million earmarked for the Sherbrooke Expansion Project.

OUTLOOK FOR 2025

The outlook for the first quarter of 2025 remains cautious, due to the uncertainty generated by the proposed trade tariffs. Kruger Products and KP Tissue have stated that they will not provide specific guidance for the first quarter until the impact of these tariffs is clearer. KP Tissue pointed out that it is evaluating the construction of a new production facility with a state-of-the-art TAD paper machine and three converting lines, as part of its strategy to expand market share and offer premium products to North American consumers.