Transcontinental Inc. announces its results for the second quarter of fiscal 2019

Highlights
•Revenues increased by $232.7 million, or 43.5%, from $534.7 million to $767.4 million, essentially as a result of the transformational acquisition of Coveris Americas, which contributed $318.4 million to revenues. This increase was mitigated by the accelerated recognition of deferred revenues of $62.3 million recorded in the second quarter of 2018 as well as the unfavourable effect of the sale of our California newspaper printing operations and the disposal of local and regional newspapers in Québec.
•Adjusted revenues (1) increased by $295.0 million, or 62.4%, from $472.4 million to $767.4 million.
•Operating earnings decreased by $55.9 million, or 56.5%, from $99.0 million to $43.1 million, mainly as a result of the effect of the accelerated recognition of deferred revenues recorded in the second quarter of 2018.
•Adjusted operating earnings (1) increased by $13.3 million, or 18.9%, from $70.3 million to $83.6 million, mainly as a result of the contribution from the acquisition of Coveris Americas.
•Net earnings decreased by $46.6 million, or 67.6%, from $68.9 million to $22.3 million due to the decline in operating earnings and higher financial expenses arising from the acquisition of Coveris Americas.
•Adjusted net earnings (1) increased by $4.1 million, or 8.5%, from $48.5 million to $52.6 million due to higher adjusted operating earnings combined with a decrease in adjusted income taxes (1).
•Optimization of the printing platform with the installation of two state-of-the-art presses as well as the gradual reduction of activities at Transcontinental Brampton in Ontario, leading to the plant’s complete closure at the end of December 2019.
•First Canadian-based manufacturer to join the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment. TC Transcontinental pledged, by 2025, for 100% of its plastic packaging to be reusable, recyclable or compostable.
•Commitment to take a leadership role in the creation of a circular economy for plastic, in order to ensure the transition into a model where plastic is better managed from sourcing to end-of-life. In this context, as of this fall, the Publisac bag will be replaced by a bag made of 100% recycled plastic.

Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the second quarter of fiscal 2019, which ended April 28, 2019.

“We have just proudly marked the first anniversary of our transformational acquisition of Coveris Americas and we are very satisfied with it, said François Olivier, President and Chief Executive Officer of TC Transcontinental. This acquisition is performing in line with our plan and has seen a gradual increase in its profit margins from quarter to quarter over the past year. In the second quarter of 2019, Coveris Americas contributed significantly to our revenues and profitability in the Packaging Sector. We remain focused on improving our profit margins, which should continue to progressively increase in the coming quarters, notably by realizing our synergies.

“On the printing side, our results continued to reflect more moderate performance in some of our verticals, including our retailer-related service offering. As we have always done, we are working to align our printing network’s capacity and our costs with our business volume. Among other things, during the quarter, we installed state-of-the-art presses in our Canadian platform and we recently announced the closure of a plant. These measures should enable us to improve our cost structure and positively contribute to this sector’s profitability.

“In summary, we expect to continue generating significant cash flows, which will first be allocated to reducing our indebtedness, while continuing to execute our business plan.”

Revenues increased by $232.7 million, or 43.5%, from $534.7 million in the second quarter of 2018 to $767.4 million in the corresponding period in 2019. Excluding the favourable effect of the accelerated recognition of deferred revenues of $62.3 million recorded in the second quarter of 2018 resulting from the agreement signed with Hearst, adjusted revenues increased by 62.4%, from $472.4 million in the second quarter of 2018 to $767.4 million in the corresponding period of 2019. This increase is largely attributable to the transformational acquisition of Coveris Americas, which contributed $318.4 million to revenues. It was partially offset by the $12.2 million unfavourable effect of the sale to Hearst of our newspaper printing operations and the unfavourable effect of disposals of local and regional newspapers in Québec. It was also mitigated by the organic decline in Printing Sector revenues, which is mostly due to a decrease in printed flyer volume related to two major customers.

Operating earnings decreased by $55.9 million, or 56.5%, from $99.0 million in the second quarter of 2018 to $43.1 million in the second quarter of 2019. This decrease is mainly due to the accelerated recognition of deferred revenues, net of accelerated depreciation, of $46.6 million recorded in the second quarter of 2018 resulting from the agreement signed with Hearst. Adjusted operating earnings increased by $13.3 million, or 18.9%, from $70.3 million to $83.6 million. This increase in mainly attributable to the contribution from the acquisition of Coveris Americas, partially offset by the above-mentioned organic decline in the Printing Sector.

Net earnings decreased by $46.6 million, or 67.6%, from $68.9 million in the second quarter of 2018 to $22.3 million in the second quarter of 2019. This decrease is mainly due to the accelerated recognition of deferred revenues, net of accelerated depreciation and related income taxes, of $34.4 million recorded in the second quarter of 2018 resulting from the agreement signed with Hearst, as well as higher financial expenses in the second quarter of 2019 compared to the corresponding period in 2018. These items were partially offset by a decrease in income taxes. On a per share basis, net earnings went from $0.89 to $0.26 due to the above-mentioned items, but also to the effect of the issuance of 10.8 million Class A Subordinate Voting Shares of the Corporation in May 2018. Adjusted net earnings increased by $4.1 million, or 8.5%, from $48.5 million in the second quarter of 2018 to $52.6 million in the second quarter of 2019. This increase is due to higher adjusted operating earnings combined with a decrease in adjusted income taxes, partially offset by higher financial expenses. On a per share basis, adjusted net earnings went from $0.63 to $0.60, mostly due to the effect of the issuance of 10.8 million Class A Subordinate Voting Shares of the Corporation, partially offset by the increase in adjusted net earnings.
more detail at: https://tctranscontinental.com/company-overview/news-room/press-releases/transcontinental-inc-announces-its-results-second-0

Back To Top
Close search
Search