KP Tissue - CEO, Dino Bianco.
CEO, Dino Bianco.
Sourced: The Org.
  • KP Tissue (TSX:KPT) has reported a 6.9 per cent increase in revenue for the quarter ending March 31, 2020
  • Total revenue jumped from C$351 million in the first quarter of 2019 to $375.1 million in the same period this year
  • Notably, net income increased to $8.4 million compared to a net loss of $3.2 million last year
  • These increases were largely attributed to increased sales volumes in Canada and the US as a result of COVID-related panic buying
  • The company declined to comment on any future impacts of the virus, but declared dividends for the quarter of $0.18 per share
  • KP Tissue (KPT) is currently up 1.18 per cent to $10.30 per share, with a market cap of $99.22 million

KP Tissue (TSX:KPT) has reported a 6.9 per cent increase in revenue for the quarter ending March 31, 2020.

The company, through its 14.8 per cent interest in Kruger Products LP, produces, distributes and sells a range of disposable tissue products across North America.

Total revenue for the first quarter of the year was reported at C$375.1 million, representing a $24.1 million increase from $351 million in the same period last year.

KP Tissue says that this was largely due to an increase in the volume of sales in Canada and the US, which resulted primarily from coronavirus-induced panic buying. However, this was partially offset by lower prices and the lack of volumes in Mexico as a result of a share sale towards the end of 2019.

Most notably, net income grew to $8.4 million this year, compared to a net loss of $3.2 million last year. The company attributed this mainly to higher adjusted EBITDA, but noted the impact of foreign exchange rates and expenses relating to operational transformation initiatives, which tempered further improvements.

These improved figures were additionally supported by a decrease in manufacturing expenses, thanks in part to favourable pulp costs and lower outsourced production activities.

This culminated in an overall reduction in the cost of sales by 1.7 per cent, or $5.6 million.

Dino Bianco, CEO of KP Tissue, said it was an exceptional quarter driven by unprecedented consumer demand.

“We saw increased demand in all our categories as consumers stocked up and used more product at home given work fromhome mandates and increased hygiene, particularly in paper towels and facial tissue.

“We expect this demand spike will partially reverse in the coming months as consumers get back to work and are well stocked on tissue products,” he added.

While KP Tissue declined to make any firm predictions regarding the future impact of the virus, it said that adjusted EBITDA is expected to be in a range lower than what was seen in the first quarter of 2020, but higher than the second quarter of last year.

The company also took the opportunity to announce its quarterly dividends of $0.18 per share, payable of July 15.

KP Tissue (KPT) is currently up 1.18 per cent to $10.30 per share at 10:42am EDT.

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