KP Tissue Releases First Quarter 2023 Financial Results

KP Tissue Inc. (KPT) (TSX: KPT) reports the Q1 2023 financial and operational results of KPT and Kruger Products Inc. (Kruger Products). Kruger Products is Canada’s leading manufacturer of quality tissue products for the Consumer market (Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and BonterraTM) and the Away-FromHome (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 13.5% interest in Kruger Products.

Kruger Products Q1 2023 Business and Financial Highlights
• Revenue was $451.0 million in Q1 2023 compared to $398.7 million in Q1 2022, an increase of $52.3 million or 13.1%.
• Adjusted EBITDA1 was $50.0 million in Q1 2023, compared to $29.1 million in Q1 2022, an increase of 71.9%.
• Net loss was $49.3 million in Q1 2023 compared to net income of $1.4 million in Q1 2022, a decrease of $50.7 million.
• Declared a quarterly dividend of $0.18 per share to be paid on July 17, 2023.

“We are pleased that our multi-faceted strategy to counter inflation is gaining traction as reflected by our strong first-quarter performance in 2023,” stated KP Tissue’s Chief Executive Officer, Dino Bianco. “Adjusted EBITDA increased nearly 72% yearover-year to $50 million on improved revenue of $451 million in the first quarter. These results were achieved mainly due to higher selling prices across all segments and regions, favourable sales mix, cost management initiatives implemented companywide, as well as ongoing productivity gains and our Memphis plant cost recovery.”

“Although we are still coping with volatile pulp prices and a weakened Canadian dollar, profitable growth remains our goal for 2023 and beyond. As the business strengthens, we intend to reinvest in our brands to drive share gains and take advantage of incremental manufacturing capacity from our Sherbrooke Expansion Project. The ramp-up of our bathroom tissue line exceeded expectations in the first quarter, while the start-up of our facial tissue and paper machine lines are scheduled for the fourth quarter of 2023 and end of 2024, respectively. As a result, we are steadily progressing along the road to recovery, while investing for the long-term,” Mr. Bianco added.
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