Kruger Products has reported volume and margin recovery in its Q3 results, highlighting “robust” Consumer tissue sale volumes.
Revenue for the quarter increased 10.9% year-on-year to $473.4m, while adjusted EBITDA was $72.4m, an increase of 135.7% compared to $30.7m in Q3 2022.
Net income for the quarter increased $51.7m to $12.9m.
Dino Bianco, Chief Executive of KP Tissue – which holds a 13.1% interest in Kruger Products – said: “Our Adjusted EBITDA was highlighted by robust sales volume in our Consumer segment and improved productivity from our network assets.
“We also benefited from a seasonally strong quarter, lower pulp and other input costs, as well as 2022 pricing carry over.
“As a result, we outperformed expectations despite an uncertain economic environment.”
For the fourth quarter, he added the business is seeing moderation in input costs but continued inflationary pressure.
“We believe volume will continue to be strong and with our previously announced pricing, our margins will be stable,” he said.
Bianco said he expects margins for the fourth quarter of 2023 to stabilise and adjusted EBITDA is expected to be in the $60-$65m range.
He added that the business will continue to reinvest to drive long-term value.
Sherbrooke Expansion Project
As a result of significant inflation across the supply chain and interest rate increases during construction, the capital cost of the Sherbrooke Expansion Project is now forecast to increase to $377.5m from $351.5m.
The additional costs are being financed by investments from Kruger Products and an $8.2m increase in the construction facility.