KP Tissue (KPT) Q4 2024 earnings summary

Executive summary

• Achieved record revenue exceeding $2 billion in fiscal 2024, with strong adjusted EBITDA in all quarters and stable profitability despite market volatility and rising input costs.

• Q4 2024 revenue grew 11.9% year-over-year to $539.6 million, driven by higher U.S. sales volume, favorable Canadian pricing, and positive FX impact.

• Q4 2024 net loss was $13.7 million, compared to net income of $16.5 million in Q4 2023, mainly due to higher FX loss, increased depreciation, and higher interest/finance costs.

• Full-year net income improved to $23.8 million from a net loss of $5.3 million in 2023.

• Declared a quarterly dividend of $0.18 per share, payable April 15, 2025.

Financial highlights

• Full-year 2024 revenue: $2,049.9 million, up 9.4% year-over-year; full-year adjusted EBITDA: $264.8 million, up 11.0%.

• Q4 2024 adjusted EBITDA: $66.8 million, up 9.2% from Q4 2023; margin at 12.4% (vs. 12.7% prior year).

• Q4 2024 cost of sales increased 14.7% year-over-year, with cost of sales as a percentage of revenue rising to 85.1%.

• Net debt at Q4 2024: $1.1 billion; net debt/LTM adjusted EBITDA ratio: 4.2x; total liquidity: $344.6 million.

• Q4 2024 CAPEX was $48.1 million; full-year CAPEX: $185.5 million; $16.6 million in cash reserved for Sherbrooke expansion.

Outlook and guidance

• Expecting continued strong U.S. sales growth and ongoing production increases in 2025, with readiness to pass on cost increases.

• No profit guidance for Q1 2025 due to market volatility and proposed U.S. tariffs; will resume guidance when conditions stabilize.

• New Sherbrooke paper machine expected to reduce purchased paper needs and benefit AFH (Kruger Pro) segment in 2025.

• Evaluating construction of a new tissue plant with advanced TAD machine and converting lines; project cost estimated at $600 million+.

• 2025 base CAPEX outlook: $40–60 million, excluding Sherbrooke Expansion Project.