First Quarter Revenue Grows At KP Tissue

First quarter sales at KP Tissue were up double-digits driven by price increases and higher sales volume in its away from home business. However, the company reported a net loss caused in large part by the recording of a significant deferred tax liability.

For the quarter ended March 31, total revenue was $451 million, up 13.1% from the first quarter of 2022. Company officials said the increase in revenue was primarily due to the favorable impact of selling price increases implemented across all segments and regions during 2022, along with favorable sales mix and higher sales volume in the away from home (AFH) segment, partially offset by lower sales volume in the consumer segment.

Net loss was $49.3 million in the first quarter compared to net income of $1.4 million in the first quarter of 2022.

Cost of sales was $389 million in the quarter compared to $363.8 million in the comparable quarter the previous year. Company officials noted that inflation experienced during 2022 appears to be moderating on a sequential basis. Manufacturing costs increased year-over-year primarily due to significantly higher pulp and other input costs and the unfavorable impact of foreign exchange fluctuations on U.S. dollar costs. Warehousing costs increased as a result of additional logistics network costs while freight rates declined.

“We are pleased that our multifaceted strategy to counter inflation is gaining traction as reflected by our strong first-quarter performance in 2023,” said Dino Bianco, CEO of KP Tissue. “These results were achieved mainly due to higher selling prices across all segments and regions, favorable sales mix, cost management initiatives implemented companywide, as well as ongoing productivity gains and our Memphis plant cost recovery.”

While the company continues working to overcome challenges that include volatile pulp prices and a weakened Canadian dollar, profitable growth remains KP Tissue’s goals for 2023 and beyond, Bianco said.

“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,” he added.