KP Tissue releases strong Q1 2024 financial results
Leading tissue manufacturer reported increased sales volume and improved profitability in the first quarter
KP Tissue Inc. unveiled its first quarter 2024 financial and operational outcomes, encompassing both KP Tissue and Kruger Products Inc., a premier tissue product manufacturer in Canada. Kruger Products, known for brands such as Cashmere®, Purex®, and SpongeTowels®, dominated both the consumer and away-from-home markets in Canada while steadily expanding its presence in the United States.
Dino Bianco, Chief Executive Officer of KP Tissue, expressed satisfaction with the results, stating: “We delivered strong financial results in the first quarter of 2024, highlighted by increased sales volume and adjusted EBITDA of $67.1 million”.
Bianco emphasized strategic efforts in bolstering their consumer segment leadership, particularly in facial tissue, following the departure of Kleenex from the Canadian grocery market. Investments in marketing, manufacturing capacity, and product innovation have been instrumental in this endeavor. Additionally, the company has intensified brand support to enhance its presence in the bathroom tissue and paper towel categories. The away-from-home business segment also exhibited promising growth trends in profitability and sales.
“Looking ahead to the remainder of 2024, we will continue to take a multi-faceted approach to drive profitable growth”, added Bianco, acknowledging anticipated challenges in commodity markets, particularly escalating pulp prices.
Key financial highlights of the first quarter of 2024 included a revenue of $479.4 million, marking a notable increase from $451.0 million in the same period last year. This growth was primarily driven by higher sales volume and a favorable sales mix in the consumer segment, partially offset by lower selling prices.
Cost of sales for the quarter amounted to $394.0 million, reflecting a modest increase from $389.0 million in Q1 2023. Higher sales volume and manufacturing overhead costs, partially mitigated by lower pulp prices and operational efficiencies, contributed to this rise.
Selling, general, and administrative expenses (SG&A) rose to $44.1 million compared to $36.3 million in Q1 2023, mainly attributed to increased investment in advertising, promotion, and IT infrastructure.
Adjusted EBITDA surged to $67.1 million in Q1 2024 from $50.0 million in the same period last year, primarily driven by higher sales volumes, favorable sales mix, and lower pulp prices.
Net income for Q1 2024 amounted to $9.0 million, a significant improvement from a loss of $49.3 million in Q1 2023. The boost was chiefly due to lower income tax expenses and higher adjusted EBITDA, partially offset by foreign exchange losses and restructuring costs.
Furthermore, KP Tissue reported a net income of $1.1 million for Q1 2024, including its share of Kruger Products’ net income, a dilution gain, and depreciation expenses related to acquisition adjustments.
In a nod to shareholders, the Board of Directors of KPT declared a quarterly dividend of $0.18 per share, payable on July 15, 2024, to shareholders of record as of June 28, 2024.
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