Currently, there is a specific global raw material shortage affecting UV curing inks. This impacts supply of a UV photoinitiator commonly known as “TPO.” While supply of TPO comes from several different manufacturers, a key chemical feedstock used in the manufacture of TPO (and other similar photoinitiators) comes from one main upstream source in China. The manufacturing of this feedstock has been temporarily halted while inspections are undertaken due to an unrelated incident in the same industrial zone. This incident comes within the wider context of similar unplanned shut downs of UV raw material capacity in China and a tighter regulatory environment in Europe limiting alternative options. This supply disruption means that the feedstock cannot be produced at present and supplies are now at critically low levels globally, which has impacted the availability and production of TPO itself. We anticipate the situation will be resolved in a matter of weeks but are taking actions to cover our supply in the meantime. Please note that this is an industry-wide shortage affecting all UV ink manufacturers. Click Read More below for additional information.
Revenues increased by $9.9 million, or 2.1%.
Operating earnings increased by $4.6 million, from $63.6 million to $68.2 million. Adjusted operating earnings, which exclude restructuring and other costs (revenues) and impairment of assets, increased by $7.2 million, or 11.5%.
Net earnings increased by $3.1 million, from $45.9 million to $49.0 million. Adjusted net earnings, which exclude restructuring and other costs (revenues) and impairment of assets, net of related taxes, increased by $6.0 million, or 13.6%.
Montreal, September 7, 2017 – Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the third quarter of Fiscal 2017, which ended July 30, 2017.
“I am proud of what we achieved in the third quarter as we continued to deploy our transformation plan while improving the Corporation’s performance,” said François Olivier, President and Chief Executive Officer of TC Transcontinental. “Our financial performance is the result of our promising strategy, diligently implemented by our teams throughout the organization.”
“The printing division posted a solid quarter, thanks to the increased demand by Canadian retailers for our service offering, in particular printed flyers. The packaging division generated, for its part, sustained organic growth resulting from the investments we made in the last few quarters. Lastly, in the Media Sector, the Business and Education group performed very well, and the process to sell our local newspapers in Quebec and Ontario is thriving. Discussions are continuing with potential acquirers in several regions.”
“Our enviable financial position and our significant cash flows provide the solid foundations that will allow us to maintain our momentum and invest in our development.”
Revenues went from $467.8 million in the third quarter of 2016 to $477.7 million in the third quarter of 2017, an increase of 2.1%. This increase is attributable to the contribution from the acquisitions in the packaging division, as well as the favourable exchange rate effect and the organic growth in revenues for the Printing and Packaging Sector. Organic growth in revenues is attributable to higher volume in the packaging division and higher demand for all services to Canadian retailers, namely for flyer and in-store marketing printing services, as well as for premedia and door-to-door distribution services, notably under the terms of the expanded agreement with Lowe’s Canada, partially offset by the decline in revenues from the other printing division verticals. The above-mentioned revenue increase is also attributable to the contribution from the acquisition of specialty financial brands and to the organic growth in revenues for the Media Sector, in particular from the educational book publishing activities. However, the contribution from these items was more than offset, mostly by the impact of the sale of media assets and the decline in revenues from the local newspaper publishing activities caused by lower advertising revenues.
Operating earnings increased by $4.6 million, from $63.6 million in the third quarter of 2016 to $68.2 million in the third quarter of 2017. Adjusted operating earnings went from $62.7 million in the third quarter of 2016 to $69.9 million in the third quarter of 2017, an increase of 11.5%. Excluding the unfavourable effect of the stock-based compensation expense as a result of the change in the share price in the third quarter of 2017 compared to the corresponding period in 2016, adjusted operating earnings increased by 18.0%. This increase is mostly attributable to the performance of the Printing and Packaging Sector due to the above-mentioned organic growth in revenues, the favourable impact of cost reduction initiatives in the printing division, the contribution from the acquisitions in the packaging division and the favourable exchange rate effect for the sector. The above-mentioned adjusted operating earnings increase is also notably attributable to the organic growth in revenues from the educational book publishing activities and the contribution from cost reduction initiatives in the Media Sector. The contribution of these items was however partially offset by the impact of the sale of media assets.
Net earnings increased by $3.1 million, from $45.9 million in the third quarter of 2016 to $49.0 million in the third quarter of 2017. This increase is mostly attributable to the increase in operating earnings, partially offset by the increase in net financial expenses. On a per share basis, net earnings went from $0.59 to $0.64. Excluding restructuring and other costs (revenues) and impairment of assets, net of related income taxes, adjusted net earnings increased by $6.0 million, or 13.6%, from $44.1 million in the third quarter of 2016 to $50.1 million in the third quarter of 2017. On a per share basis, adjusted net earnings went from $0.57 to $0.65.
more detail at: http://tctranscontinental.com/en/-/transcontinental-inc-announces-its-financial-results-for-the-third-quarter-of-fiscal-2017