KP Tissue reports revenue and profit growth in Q1 2025

KP Tissue Inc. has released the financial and operational results for the first quarter of 2025 for both KPT and Kruger Products Inc., Canada’s leading manufacturer of tissue products. Kruger Products posted revenue of CAD$546.1 million, a 13.9% increase compared to the same period last year, driven by higher sales volume and favorable pricing in both Canada and the United States.

KPT, which holds a 12.3% interest in Kruger Products, reported net income of CAD$1.7 million, including CAD$1.9 million representing its share of Kruger Products’ earnings.

REVENUE AND ADJUSTED EBITDA GROWTH

Adjusted EBITDA for Kruger Products reached CAD$75.8 million, up 12.9% from CAD$67.1 million in Q1 2024. The increase was primarily driven by higher sales volumes in the Consumer segment in Canada and the U.S., along with improved pricing.

The company also highlighted the performance of its newly rebranded Away-from-Home division, now called Kruger PRO, which saw higher sales volume compared to the same period last year. However, profitability was impacted by increased freight, warehousing and third-party product sourcing costs.

SHERBROOKE PROJECT EXCEEDS EXPECTATIONS

KP Tissue CEO Dino Bianco emphasized the strong performance of the company’s recent investments: “We are pleased with our strong first-quarter results, especially considering the uncertain and volatile economic environment. […] We expect that our newly deployed LDC paper machine in Sherbrooke will essentially meet all in-house paper requirements beginning in the second quarter of 2025”.

According to Bianco, both the new facial tissue converting line and the TAD paper machine continue to perform well, exceeding start-up expectations and delivering strong year-over-year results.

TARIFF IMPACT AND Q2 OUTLOOK

Despite recent changes to tariff announcements in North America, Bianco stated that the impact on business during the first quarter was limited. The company continues to monitor developments and has contingency plans in place to mitigate potential financial risks.

Looking ahead, Adjusted EBITDA for Q2 2025 is expected to range between CAD$70 million and CAD$75 million, assuming a similar tariff environment.

COSTS AND INVESTMENTS

Cost of sales increased by 14.5%, totaling CAD$451.0 million, due to higher sales volume, pulp prices and exchange rate impacts. SG&A expenses rose by 16.1% to CAD$51.2 million, driven by increased investment in advertising, IT, and workforce expansion to support growth.

As of March 31, 2025, Kruger Products reported total liquidity of CAD$356.8 million, including CAD$4.4 million reserved for the Sherbrooke expansion project.

QUARTERLY DIVIDEND

KPT’s Board of Directors declared a quarterly dividend of CAD$0.18 per share, payable on July 15, 2025, to shareholders of record at the close of business on June 30, 2025.